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.
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 price elasticity of demand for a perfectly inelastic demand curve is zero. This is correct. Price elasticity of demand measures the responsiveness of quantity demanded to changes in price. In the case of a perfectly inelastic demand curve, the quantity demanded does not change regardless of price changes. This means that the percentage change in quantity demanded is zero for any change in price. As a result, the price elasticity of demand, which is the ratio of the percentage change in quantity demanded to the percentage change in price, becomes zero.
The reason provided states that a perfectly inelastic demand curve is vertical, indicating that quantity demanded does not change regardless of price changes. This reason supports the assertion. In a perfectly inelastic demand curve, the quantity demanded remains constant, represented by a vertical line. This indicates that no matter how much the price changes, the quantity demanded does not respond, affirming that the price elasticity of demand is indeed zero.
Therefore, both the assertion and reason are correct and related. The price elasticity of demand for a perfectly inelastic demand curve is indeed zero, as explained by the reason.
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 elastic demand curve is infinity.
Reason: A perfectly elastic demand curve is horizontal, indicating that the quantity demanded becomes infinite at a specific price.
Reason: A perfectly elastic demand curve is horizontal, indicating that quantity demanded becomes infinite at a specific price.
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: Elasticity of demand measures the responsiveness of quantity demanded to changes in price.
Reason: Elasticity of demand is calculated as the percentage change in quantity demanded divided by the percentage change in price.
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