Short Answer

Perfectly inelastic demand is a situation where the quantity demanded does not change at all, even when the price changes. In this case, consumers continue to buy the same amount regardless of price.

This means demand is completely unresponsive to price changes. Such demand is usually seen in essential goods where people have no choice but to buy them.

Detailed Explanation:

Meaning of Perfectly Inelastic Demand

Definition

Perfectly inelastic demand refers to a situation where the quantity demanded remains constant even when there is a change in price. In this case, elasticity of demand is equal to zero.

This means that consumers are not sensitive to price changes at all. No matter how much the price increases or decreases, the demand remains the same.

Example

A common example of perfectly inelastic demand is life-saving medicines. Even if the price of such medicines increases, people will still buy them because they are necessary for survival.

Another example can be basic necessities in extreme situations, like water in a desert. People will pay any price to get it because they cannot live without it.

Features of Perfectly Inelastic Demand

Zero Elasticity

The most important feature is that elasticity is zero. This means there is no change in demand despite changes in price.

Fixed Quantity Demanded

The quantity demanded remains constant at all price levels. Consumers continue to purchase the same amount.

Vertical Demand Curve

The demand curve in this case is a vertical straight line. This shows that price changes do not affect quantity demanded.

No Substitutes

Such goods usually have no close substitutes. Consumers cannot switch to other products even if prices increase.

Essential Nature of Goods

Perfectly inelastic demand is mostly seen in essential goods that are necessary for survival, such as medicines or emergency items.

Conclusion

Perfectly inelastic demand is a situation where demand does not change with price changes and elasticity is zero. It is mainly seen in essential goods with no substitutes. This concept helps in understanding extreme cases of consumer behavior in Economics.