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Zero elasticity, or perfect inelasticity. What does this term mean?
AA price change, however large, results in zero change in quantity
BQuantity changes by an infinite amount for any price change
CPrice and quantity always move by identical percentages
DQuantity responds only to income changes, never to price
Answer & Solution
Correct answer: A. A price change, however large, results in zero change in quantity
1. Zero elasticity is the opposite polar extreme from infinite elasticity.
2. It describes a case where no matter how large the percentage change in price is, quantity does not change at all.
3. Quantity changing by an infinite amount describes infinite elasticity, the opposite extreme.
4. Constant unitary elasticity is a third, separate case where price and quantity move by equal percentages, not zero elasticity.
_Source: OpenStax Principles of Microeconomics for AP Courses (CC BY 4.0), Ch 5 "Elasticity", section 5.2 | Polar Cases of Elasticity and Constant Elasticity_
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