State whether the following statements are TRUE and FALSE.
2. Perfectly inelastic demand curve is parallel to the X axis.
Answer:
FALSE
Perfectly inelastic demand implies that the demand for the commodity is completely unresponsive to the change in the price of the commodity. That is, a change in price has no effect on the demand. A specific quantity of the good would be demanded no matter the price. In such cases, the demand curve is vertical line parallel to Y axis.
