A price elasticity of infinity corresponds to a demand curve that is:
A) horizontal.
B) downward sloping with a slope always equal to 1.
C) vertical.
D) either vertical or horizontal.

Question

Quizplus · Accepted Answer

A price elasticity of infinity means that the demand for the good is perfectly elastic, which corresponds to a horizontal demand curve. This means that any increase in price will result in consumers completely switching to a substitute good, and any decrease in price will result in a complete shift in demand towards this good.

A Price Elasticity of Infinity Corresponds to a Demand Curve