Figure 4.2

-Refer to Figure 4.2. The demand curve E has a price elasticity
A) of infinity.
B) equal to 1.
C) equal to zero.
D) less than 1.
E) that varies at different points along the demand curve.

Question

Figure 4.2
 
-Refer to Figure 4.2. The demand curve E has a price elasticity
A) of infinity. 
B) equal to 1. 
C) equal to zero. 
D) less than 1. 
E) that varies at different points along the demand curve.

Quizplus · Accepted Answer

A demand curve with a price elasticity of infinity is perfectly elastic, meaning that any change in price will result in an infinite change in quantity demanded. This can be seen in the horizontal line at P1 in curve E, indicating that consumers are willing to purchase any quantity at that price point, but if the price were to increase even slightly, they would not purchase any units.

Figure 4.2 -Refer to Figure 4.2. the Demand Curve E Has a Curve