Question

the president of tucker motors says, \lowering the price wont sell a single additional tucker car.\ the president believes that the price elasticity of demand is:
a. unitary elastic.
b. elastic.
c. perfectly elastic.
d. perfectly inelastic.

Explanation:

Price elasticity of demand measures how much quantity demanded changes in response to a price change. Perfectly inelastic demand means quantity demanded does not change at all when price changes, which matches the president's claim that a price drop will not lead to any additional sales. Unitary elastic means quantity changes proportionally to price, elastic means quantity changes more than proportionally, and perfectly elastic means even a tiny price change leads to an infinite change in quantity demanded—none of these fit the president's statement.

Answer:

d. perfectly inelastic.