Question

Demand curve is parallel to ‘Y’-axis in the case of ______.

Options

• Perfectly elastic demand 

• Perfectly inelastic demand

• Relatively elastic demand

• Relatively inelastic demand

Answer 1

Demand curve is parallel to ‘Y’-axis in the case of perfectly inelastic demand.

Explanation:

When the demand curve is parallel to the Y-axis, it means that quantity demanded does not change at all, no matter how much the price changes. 

This situation is called perfectly inelastic demand. In this case:

• Elasticity of demand = 0
• The good is absolutely necessary (like life-saving medicines)
• The demand curve is vertical, i.e., parallel to the Y-axis.