If the demand for a commodity remains constant as price increases, the commodity is said...
ECONOMICS
WAEC 2023
If the demand for a commodity remains constant as price increases, the commodity is said to be
- A. perfectly price inelastic
- B. unit price elastic
- C. price elastic
- D. price inelastic
Correct Answer: D. price inelastic
Explanation
If the demand for a commodity remains constant as price increases, the commodity is said to be perfectly price inelastic. This means that the quantity demanded of the commodity does not change at all in response to changes in price.
Price elasticity of demand is a measure of how responsive the demand for a good or service is to changes in its price. It is calculated as the percentage change in quantity demanded divided by the percentage change in price.
A perfectly price inelastic good has an elasticity of demand of 0. This means that the quantity demanded does not change at all in response to changes in price.
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