If the demand curve is a vertical line, it means that: A regardless of price, the quantity demanded is a constant amount. B regardless of quantity, the price is a constant amount. C the good is inferior. D the good has many substitutes.
The Correct Answer and Explanation is:
Correct Answer: A. Regardless of price, the quantity demanded is a constant amount.
In economics, the demand curve shows the relationship between the price of a good and the quantity of that good consumers are willing and able to purchase. When we graph this relationship, price is typically on the vertical (Y) axis and quantity demanded on the horizontal (X) axis.
A vertical demand curve is a special case. It represents a situation where the quantity demanded remains constant regardless of the price. In other words, no matter how high or low the price goes, consumers will still buy the same amount. This type of demand is referred to as perfectly inelastic demand.
Perfectly inelastic demand often applies to essential goods or necessities for which there are no close substitutes and for which consumption is not sensitive to price changes. A common example is life-saving medication such as insulin for diabetic patients. Regardless of whether the price increases or decreases, patients must obtain the same amount of insulin to survive.
To visualize this, imagine a vertical line on a graph crossing the X-axis at a fixed quantity (e.g., 100 units). No matter how far up or down you go on the Y-axis (price), the line remains at 100 units, indicating unchanging quantity demanded.
This contrasts with a horizontal demand curve, which represents perfectly elastic demand, where consumers are only willing to pay one price. If the price changes even slightly, quantity demanded drops to zero.
Options C and D are incorrect because whether a good is inferior or has substitutes affects the shape and elasticity of the demand curve but does not produce a vertical line. Option B is incorrect because a constant price would mean a horizontal line, not vertical.
Therefore, a vertical demand curve clearly indicates that quantity demanded does not respond to changes in price—which is best described by option A.
