The correct answer is: C. Both 1 and 2
When the percentage change in demand is greater than that of price, then demand is relatively inelastic. This is because the quantity demanded is not very sensitive to changes in price. For example, if the price of bread goes up by 10%, but the quantity demanded only goes down by 2%, then demand is relatively inelastic.
When the demand remains unchanged at all price variation, it is perfectly inelastic. This is because the quantity demanded is completely unresponsive to changes in price. For example, if the price of water goes up by 100%, but the quantity demanded remains the same, then demand is perfectly inelastic.
Both of these statements are correct.