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Draw the demand curve for a good with a price elasticity of demand equal to 0....

Draw the demand curve for a good with a price elasticity of demand equal to 0. What can you say about substitutes available to the consumer for this good?

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Ans) Price elasticity of demand is the responsiveness of quantity demanded to change in price. If PED is zero, that means good is Perfectly inelastic. That is, quantity demanded will not change with change in price.

When good is Perfectly inelastic, there is no (or very little) substitutes are available for that product and also that product is quite a necessity. Therefore, people will have no choice but to buy that good or service, despite the increase in price.

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