Question

Identify and explain the concepts from the given illustrations:

Price of salt increases by ₹ 20 to ₹ 50, still there is no change in demand for salt.

Answer 1

Identified concept: Perfectly inelastic demand.

Explanation of concept: When a change in the price of a product leads to no change in the quantity demanded, the demand is called perfectly inelastic. In this case, the elasticity of demand has a numerical value of zero.