Dear Student,
When there is no change in quantity demanded of a good corresponding to a change in its price, the demand for the product is said to be perfectly inelastic. This indicates that the good concerned is a basic good, the quantity demanded for which cannot be altered. For example, salt or medicines- their quantity demanded cannot be changed because of change in their price.
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When there is no change in quantity demand?
When the demand of a quantity does not change as a result of a change in the price of a commodity, the demand of that commodity is called a perfectly inelastic demand. In this case, the elasticity of demand is zero.
What is the response of the quantity demanded to change in price of the commodity?
A measure of the responsiveness of quantity demanded to changes in the price of a related good is known as cross elasticity of demand.
Is the responsiveness of to change in price?
The measure economists use to describe the responsiveness of demand for a good or service to a change in the price of another good or service is called the cross price elasticity of demandIt equals the percentage change in the quantity demanded of one good or service at a specific price divided by the percentage change ...