Question

When is the demand for a commodity said to be perfectly inelastic?

Answer 1

The demand for a commodity is said to be perfectly inelastic when the quantity demanded remains constant independent of price fluctuations. It means that consumers will buy the same amount of the commodity regardless of how expensive or cheap it becomes, demonstrating a complete lack of reactivity to price fluctuations. In this case, the price elasticity coefficient (E_d) is strictly equal to zero (E_d = 0), because the percentage change in quantity demanded is always zero.