Question

When the price elasticity of demand for a good equals zero,

A. the demand curve will be horizontal.
B. the demand curve will be vertical.
C. the slope of the demand curve will be zero.
D. too few consumers demand the good.
E. too many consumers demand the good.

Answer 1

The demand curve will be vertical when the price elasticity of demand for a good equals zero, indicating a perfectly inelastic demand where quantity demanded doesn't change with price.

Step-by-step explanation:

When the price elasticity of demand for a good equals zero, it indicates that the quantity demanded does not respond at all to changes in price. In this case, the demand curve will be vertical.

This situation is referred to as perfectly inelastic demand, where consumers will demand the same amount regardless of the price level.

For example, essential medications might have a perfectly inelastic demand because patients need them irrespective of the cost.