Question

Seth is a competitive body builder. He says he has ti have his 12 oz package of protein to " feed his muscles" every day. On the basis of this information, what can you conclude about his price elasticity of demand for protein powder?
1. It is perfectly inelastic
2. It is perfectly elastic
3. The price elasticity coefficient is 0
4. it is elastic

Answer 1

Answer:

1. It is perfectly inelastic

Explanation:

Elasticity of Demand is the responsiveness of demand to price change.

• Elastic Demand > 1 ; implies demand changes proportionately more than price change
• Inelastic Demand < 1 ; implies demand changes proportionately less than price change
• Perfectly Elastic Demand  = ∞ ; implies demand changes infinitely to price change, so the prices are constant
• Perfectly Inelastic Demand = 0 ; implies demand doesn't respond to price change, so quantity demanded is constant

Given : Seth body builder needs 12oz protein packet to 'feed his muscles' depicts that it is a necessity good to him. Being a necessity good, it would be demanded by Seth irrespective of price.

So, the demand is perfectly inelastic.