Question

Shep goes to his favorite coffee shop every morning and always buys one large latte, no matter whether there is a special or not (i.e., half-price Mondays).
What is his price elasticity of demand for lattes?

Answer 1

Answer:

Price elasticity of demand = 0

Explanation:

The price elasticity of demand is zero because Shep's demand for lattes is perfectly inelastic since an alteration in price (i.e., half-price Mondays) does not affect consumption in the slightest, which means that he will always consume exactly one latte every morning regardless of price.