CA Foundation · Business Economics · Theory of Demand and Supply
When the price of a good changes, the quantity demanded does not change at all. The demand curve for such a good is:
The demand curve is a vertical straight line with elasticity of zero. Quantity demanded does not respond to price, so the percentage change in quantity is zero. This is perfectly inelastic demand, the opposite of the horizontal line for perfectly elastic demand.
- AA horizontal straight line, with elasticity equal to infinity
- BA vertical straight line, with elasticity equal to zeroCorrect
- CA rectangular hyperbola, with elasticity equal to one
- DA downward sloping straight line, with elasticity equal to one
Explanation
If quantity demanded stays the same at every price, the percentage change in quantity is zero, so elasticity is zero (perfectly inelastic). The curve is vertical. A horizontal line is perfectly elastic demand, and a rectangular hyperbola shows unitary elasticity.
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