The correct answer is: A. Inelastic.
Inelastic demand is a situation in which the quantity demanded of a good or service changes very little in response to a change in price. This means that when the price of a good or service goes up, consumers are not very likely to buy less of it, and when the price goes down, they are not very likely to buy more of it.
There are a number of reasons why demand might be inelastic. One reason is that the good or service in question is a necessity. For example, people need to buy food and water, even if the price goes up. Another reason is that there are few substitutes available for the good or service. For example, if the price of gasoline goes up, people may not be able to switch to another form of transportation, such as public transportation or biking.
Inelastic demand can be a problem for businesses, because it means that they have less control over their profits. If the price of a good or service goes up, the business will not be able to pass on all of the increase to consumers, because consumers will simply buy less of the good or service. This means that the business’s profits will not increase as much as the price of the good or service.
However, inelastic demand can also be a benefit for businesses. If the price of a good or service goes down, the business will not have to lower its prices as much, because consumers will still buy the good or service. This means that the business’s profits will not decrease as much as the price of the good or service.
Overall, inelastic demand is a complex issue with both positive and negative implications for businesses. Businesses need to carefully consider the demand for their products and services when making pricing decisions.
Here is a brief explanation of each option:
- Inelastic demand: As mentioned above, inelastic demand is a situation in which the quantity demanded of a good or service changes very little in response to a change in price.
- Elastic demand: Elastic demand is a situation in which the quantity demanded of a good or service changes a lot in response to a change in price.
- Unrelated demand: Unrelated demand is a situation in which the quantity demanded of a good or service does not change at all in response to a change in price.
- Perfectly elastic demand: Perfectly elastic demand is a situation in which the quantity demanded of a good or service changes infinitely in response to a change in price.