If the demand curve for a good is a horizontal line,then the good has
A)zero income elasticity.
B)price elasticity of demand equal to zero.
C)a perfectly elastic demand.
D)a price elasticity of demand that is likely to rise in the short run.
E)a price elasticity of demand that is likely to fall in the short run.

Question

Quizplus · Accepted Answer

A horizontal demand curve indicates a perfectly elastic demand, meaning that consumers are extremely sensitive to even small changes in price, and will completely stop buying the good if the price rises even slightly. This also means that the price elasticity of demand for this good is infinite (not zero).

If the Demand Curve for a Good Is a Horizontal