If the demand for a good is perfectly elastic, the price elasticity of demand is equal to _____ and the demand curve is _____.
A)zero; downward sloping
B)infinity; horizontal
C)three; upward sloping
D)two; kinked
E)one; vertical

Question

Quizplus · Accepted Answer

If the demand for a good is perfectly elastic, it means that any increase in price will cause consumers to completely stop purchasing the good. This results in an infinitely large change in quantity demanded for any change in price, making the price elasticity of demand equal to infinity. The demand curve is horizontal because the quantity demanded is completely responsive to any change in price.

If the Demand for a Good Is Perfectly Elastic, the Price