When Demand Is Perfectly Inelastic,the Price Elasticity of Demand

question 17

Multiple Choice

When demand is perfectly inelastic,the price elasticity of demand

• A)is zero,and the demand curve is vertical.
• B)is zero,and the demand curve is horizontal.
• C)approaches infinity,and the demand curve is vertical.
• D)approaches infinity,and the demand curve is horizontal.

---

Definitions:

Recession

A significant decline in economic activity across the economy, lasting more than a few months, typically visible in real GDP, income, employment, industrial production, and wholesale-retail sales.

Store-Wide Sale

A promotional event where discounts are offered on most or all items within a store.

Superiors

Individuals in higher positions or ranks within an organization, with authority or managerial responsibility over others.

Myopic Loss Aversion

The tendency of investors to react disproportionately to short-term losses compared to long-term gains.