When elasticity is zero, the demand curve is_____________

1. Analyze the question The question asks what the demand curve looks like (or is called) when price elasticity of demand equals zero.

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

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

• If PED = 0, quantity demanded does not change at all when price changes.
• This is called perfectly inelastic demand.
• On a graph, the demand curve is a vertical straight line, parallel to the price axis.

3. Step-by-step solution

• Let PED = 0, so % change in quantity = 0 no matter how much price changes.
• The quantity stays fixed, so the curve is vertical.
• Check the options: • A. Circular: no demand curve has this shape for elasticity. • B. Downward sloping: this is the normal demand curve, with elasticity between 0 and infinity, not exactly zero. • C. Perfectly inelastic: correct, because zero elasticity is by definition perfectly inelastic demand. • D. Concave: not a description of zero elasticity.

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

5. Exam tip Remember the extremes:

• PED = 0 → perfectly inelastic → vertical line (think "0 looks like a standing line" or "Zero = Zero response").
• PED = ∞ → perfectly elastic → horizontal line.

Examples of near-zero elasticity goods include life-saving drugs like insulin.