Multiple choice

The requirement is to identify the price elasticity of an essential product with no substitutes. In the pharmaceutical industry where a diabetic must have insulin no matter the cost and where there is no other substitute, the diabetic’s demand curve is best described as ___________.

  1. perfectly elastic

  2. perfectly inelastic

  3. elastic

  4. inelastic

  5. none of these

Reveal answer Fill a bubble to check yourself
B Correct answer
Explanation

Demand for the product is perfectly inelastic because the diabetic will purchase the product regardless of the price.