What is the meaning of perfectly inelastic demand and perfectly elastic demand? How would each be graphed?
Please provide the best answer for the statement.
Perfectly inelastic demand indicates that there is no change in quantity demanded for a percentage change in price. The elasticity of demand is zero in this case. The graph, with price on the vertical axis and quantity on the horizontal axis, would be a vertical line at the level of quantity demanded. Perfectly elastic demand indicates that a very small change in price results in a zero to infinite change in quantity demanded. The elasticity of demand is infinite in this case. The graph, with price on the vertical axis and quantity on the horizontal axis, would be a horizontal line across quantity at one price level.
You might also like to view...
What conditions must be satisfied if resources are used efficiently?
What will be an ideal response?
The equivalent variation is always less than the consumer's income
Indicate whether the statement is true or false
If U.S. net exports are $100 billion and the U.S. purchased $250 billion in foreign assets, then what amount of U.S. assets did foreigners purchase?
a. $150 billion b. -$100 billion c. $250 billion d. -$150 billion e. $50 billion
Which best describes the backing for money in the United States?
A. The gold stored in the Federal Reserve Bank of New York. B. The acceptability of it as a medium of exchange. C. The size of the budget surplus in the U.S. government. D. The willingness of foreign government to hold U.S. dollars.