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JAMB Economics 1978 Question 4

Question 4

Elasticity

When elasticity is zero, the demand curve is

  1. A.perfectly elastic
  2. B.perfectly inelastic
  3. C.concave
  4. D.downward sloping
  5. E.circular.
Show the answer and explanation

Answer: B (perfectly inelastic)

Explanation

Zero elasticity means quantity demanded does not change at all when price changes, giving a vertical, perfectly inelastic demand curve.