Question

The price elasticity of demand is given by this equation: Price Elasticity of Demand equals StartFraction percentage change in the quantity demanded Over percentage change in price EndFractionPrice Elasticity of Demand=percentage change in the quantity demandedpercentage change in price When you are using this equation, what does it mean when you obtain a zero in the numerator?

Answer 1

Answer: It means that the demand is totally inelastic.

Explanation:

We talk abaout inlestic demand when a change in the price does not change at all the amount consumed, nor when a price is reduced neither when is rised.

A traditional example of inelastic goods is water, since it is necessary to live and no matter how much its price increases we will not stop consuming it.