If Demand for a Good Is Perfectly Inelastic, Then

question 307

Multiple Choice

If demand for a good is perfectly inelastic, then

• A) a price increase would cause a fall in quantity demanded.
• B) a price increase would cause no change in quantity demanded.
• C) a price increase would cause an increase in quantity demanded.
• D) a price increase would cause a fall in total revenue.

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Definitions:

Domestic Investment

The total capital expenditure on physical assets (like buildings, machinery, and equipment) within a country's borders to produce goods and services.

Net Capital Outflow

The net flow of funds invested abroad by a country, over a specific time period, typically calculated as the difference between domestic savings and investment.

GDP

Gross Domestic Product (GDP) is the total monetary value of all goods and services produced within a country's borders in a specific time period, serving as a broad indicator of economic health.

Consumption Expenditures

The total amount spent by consumers on goods and services.