Which of the following line-drawing is related to perfectly inelastic demand?

The correct answer is - Option 1

Key Points

• Perfectly Inelastic Demand
  • In a perfectly inelastic demand scenario, the quantity demanded does not change with a change in price.
  • This is represented by a vertical line on a graph, indicating that the quantity demanded remains constant regardless of price fluctuations.
  • Option 1 illustrates this vertical line, accurately depicting perfectly inelastic demand.

Additional Information

• Demand Elasticity
  • Elasticity of demand measures how much the quantity demanded responds to changes in price.
  • Elastic Demand:
    • Characterized by significant changes in quantity demanded when prices change.
    • Represented by a flatter demand curve.
  • Inelastic Demand:
    • Characterized by minor changes in quantity demanded with changes in price.
    • Represented by a steeper demand curve.
• Applications of Perfectly Inelastic Demand
  • Typically seen in essential goods and services, where consumers need them regardless of price changes.
  • Examples include life-saving medicines and basic utilities.