Question

A 4 percent reduction in the price of a product has zero effect on the dollar amount of consumer expenditure on the product. The price elasticity of demand is

Answer 1

Answer:

Perfectly inelastic

Explanation:

In the case where there is a reduction in a price that does not impact the demand done by the consumers so the elasticity of demand with respect to the price would be zero i.e. perfectly inelastic demand

As in the given case there is 4 percent decreased in the price of the product that has no impact on the consumption spenditure so the price elasticity of demand is zero

hence, the same is to be considered