Question

The value of elasticity of demand in perfectly inelastic demand is?

A One Correct Answer Incorrect Answer
B Less than unity Correct Answer Incorrect Answer
C Infinity Correct Answer Incorrect Answer
D Zero Correct Answer Incorrect Answer

Solution

When the price elasticity of demand for a good is perfectly inelastic (Ed = 0), changes in the price do not affect the quantity demanded for the good; raising prices will always cause total revenue to increase.

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