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.
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 the demand for a product is perfectly inelastic when the quantity demanded remains constant regardless of price changes. This is correct. Perfectly inelastic demand means that the quantity demanded does not change at all in response to price changes. Regardless of whether the price increases or decreases, the quantity demanded remains constant.
The reason states that perfectly inelastic demand occurs when the price elasticity of demand is zero. This is also correct and supports the assertion. Price elasticity of demand measures the responsiveness of quantity demanded to changes in price. When the price elasticity of demand is zero, it indicates that a change in price has no effect on the quantity demanded. This aligns with the concept of perfectly inelastic demand, where the quantity demanded remains constant regardless of price changes.
Therefore, both the assertion and reason are correct and related. Perfectly inelastic demand occurs when the quantity demanded remains constant regardless of price changes, and this corresponds to a price elasticity of demand of 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: 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.
Question : Assertion: When the price of a product increases by 10%, and the quantity demanded decreases by 20%, the price elasticity of demand is 0.5.
Reason: Price elasticity of demand measures the percentage change in quantity demanded divided by the percentage change in price.
Question : Assertion: When the price of a product increases by 10% and its quantity demanded decreases by 10%, the price elasticity of demand is -1.
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.
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