When elasticity is zero, demand curve is

1. Analyze the question You are asked what the demand curve looks like when price elasticity of demand (PED) equals zero.

2. Explain the concept Price elasticity of demand measures how responsive quantity demanded is to a change in price:

PED = % change in quantity demanded ÷ % change in price

• PED = 0: quantity demanded does not change at all when price changes. This is perfectly inelastic demand, and the curve is a vertical straight line.
• PED = ∞: any small price change makes demand fall to zero. This is perfectly elastic demand, and the curve is a horizontal line.
• PED = 1: unitary elasticity.
• 0 < PED < 1: inelastic.
• PED > 1: elastic.

3. Solution step by step

• Elasticity is zero, so the numerator (% change in quantity) is zero however much price changes.
• Quantity stays fixed, so the curve is vertical.
• A vertical demand curve is called perfectly inelastic.

Checking the options:

• A. Perfectly elastic: this is PED = infinity (horizontal curve). Wrong.
• B. Perfectly inelastic: PED = 0 (vertical curve). Correct.
• C. Downward sloping: this is the normal demand curve, with PED between 0 and infinity. Wrong.
• D. Upward sloping: this is not a normal demand curve (it is typical of supply). Wrong.

4. Answer The correct option is B. perfectly inelastic.

5. Exam tip Remember: "Zero = Vertical = Very stubborn." Consumers don't change their quantity no matter the price (think of life-saving drugs such as insulin). Infinity is the opposite and gives a horizontal line. A good mnemonic: "I" for Inelastic looks like a vertical "I".