If demand is perfectly elastic,
A)The demand curve is vertical.
B)The demand curve is very steep.
C)The demand curve is horizontal.

Question

Quizplus · Accepted Answer

Perfectly elastic demand means that consumers are extremely sensitive to changes in price, to the point where any increase in price would cause a drop in demand to zero. In this case, the demand curve is horizontal because any increase in price would cause demand to drop to zero, and any decrease in price would cause demand to increase infinitely. Thus, the quantity demanded is solely determined by the price, and the demand curve is perfectly elastic or flat.

If Demand Is Perfectly Elastic