PRC-3 · Chapter 11 · Question 2 of 57
A diabetic patient requires a specific daily dose of insulin to survive. Even when the pharmaceutical company doubles the price of the insulin, the patient continues to purchase the exact same quantity. What is the elasticity of demand for this insulin?
Test yourself: pick an answer
Reveal answer & explanation
Correct answer: B) Perfectly inelastic
Explanation
When the quantity demanded does not change at all regardless of price changes (PED = 0), the demand is completely unresponsive, or perfectly inelastic.
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