JAMB 2023 Economics · Question 8

The type of price elasticity of demand for a commodity whose quantity demanded remain unchanged despite changes in the price is

Options

  1. A.Perfectly elastic
  2. B.Infinitely elastic
  3. C.Inelastic
  4. D.Perfectly inelastic

Answer: D. Perfectly inelastic

Explanation written with AI and checked against the answer key

Step 1: Analyze the question The question describes a commodity whose quantity demanded does not change at all, no matter how much the price changes. We need to name that type of price elasticity of demand (PED).

Step 2: 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

The main types are:

| Type | PED value | Meaning | |---|---|---| | Perfectly inelastic | 0 | Quantity demanded does not change at all when price changes | | Inelastic | between 0 and 1 | Quantity changes by a smaller percentage than price | | Unitary elastic | 1 | Quantity changes by the same percentage as price | | Elastic | greater than 1 | Quantity changes by a larger percentage than price | | Perfectly (infinitely) elastic | infinity | Any price rise reduces demand to zero; the consumer buys any amount at one price |

Step 3: Apply it Quantity demanded remains unchanged, so the % change in quantity = 0.

PED = 0 ÷ (% change in price) = 0

A PED of zero means perfectly inelastic demand. The demand curve is a vertical straight line. Examples are life-saving drugs like insulin for a patient who must have it.

Step 4: Check the options

  • A. Perfectly elastic: PED = infinity, with a horizontal demand curve. Wrong.
  • B. Infinitely elastic: this is the same as perfectly elastic. Wrong.
  • C. Inelastic: quantity does change, only by a smaller proportion. Wrong, because here it does not change at all.
  • D. Perfectly inelastic: PED = 0. Correct.

Tip: Picture the demand curve's shape.

  • Vertical line → quantity doesn't move → perfectly inelastic (PED = 0)
  • Horizontal line → perfectly elastic (PED = ∞)

Remember: "Vertical = Very stubborn buyers", since they buy the same amount regardless of price.

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