From the graph below; the price elasticity of demand is?

A. unitarily elastic
B. perfectly elastic
C. perfectly inelastic
D. fairly inelastic

Correct Answer:

Option C – perfectly inelastic

Explanation

Price elasticity of demand is the degree to which a change in price would affect the quantity demanded or supplied of a product. From the diagram above, price elasticity of demand is perfectly inelastic (that is, the quantity demanded does not respond to price.) When price was zero, the quantity demanded remained unchanged/ the same.