Question : Assertion: Perfectly inelastic demand implies that consumers are unresponsive to changes in price.
Reason: In perfectly inelastic demand, the quantity demanded remains the same regardless of price changes.
Option 1: Both the assertion and reason are correct and related.
Option 2: Both the assertion and reason are correct but not related.
Option 3: The assertion is correct, but the reason is incorrect.
Option 4: The assertion is incorrect, but the reason is correct.
Correct Answer: Both the assertion and reason are correct and related.
Solution : The correct answer is (A) Both the assertion and reason are correct and related.
The assertion states that perfectly inelastic demand implies that consumers are unresponsive to changes in price. This is correct because in perfectly inelastic demand, the quantity demanded remains constant regardless of changes in price. Consumers are willing to purchase the same quantity of the good regardless of price fluctuations, indicating a lack of responsiveness to price changes.
The reason states that in perfectly inelastic demand, the quantity demanded remains the same regardless of price changes. This is also correct because the defining characteristic of perfectly inelastic demand is that the quantity demanded does not change in response to price variations. The demand curve for a perfectly inelastic good is vertical, indicating a fixed quantity demanded at all price levels.
Therefore, both the assertion and reason are correct, and they are related as the reason supports and explains the concept mentioned in the assertion.
Question : Assertion: The demand for a product is perfectly inelastic when quantity demanded remains constant regardless of price changes.
Reason: Perfectly inelastic demand occurs when the price elasticity of demand is zero.
Question : Assertion: The price elasticity of demand for a perfectly inelastic demand curve is zero.
Reason: A perfectly inelastic demand curve is vertical, indicating that quantity demanded does not change regardless of price changes.
Question : Assertion: The demand for essential goods like food and water is generally inelastic.
Reason: Essential goods have limited substitutes, and consumers are willing to purchase them regardless of price changes.
Question : Assertion: The price elasticity of demand for a perfectly elastic demand curve is infinity.
Reason: A perfectly elastic demand curve is horizontal, indicating that the quantity demanded becomes infinite at a specific price.
Question : Assertion: The concept of elasticity of demand is only applicable to individual consumers.
Reason: Elasticity of demand measures the responsiveness of quantity demanded to changes in price.
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