If Demand Is Perfectly Inelastic, the Demand Curve Is Vertical

question 21

True/False

If demand is perfectly inelastic, the demand curve is vertical, and the price elasticity of demand equals 0.

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Definitions:

Principle of Parsimony

A principle stating that among competing hypotheses, the one with the fewest assumptions should be selected.

Cyclical Variation

Fluctuations in data series that occur in regular or periodic patterns over time, often related to economic cycles.

Wavelike Pattern

A pattern characterized by cyclic alternations resembling the form of waves, which can occur in various contexts such as data trends or physical phenomena.

Exponential Smoothing

Exponential smoothing is a time series forecasting method for univariate data that applies weighting factors which decrease exponentially over time.