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Question : A demand curve, which is parallel to the horizontal axis, showing quantity, has a price elasticity equal to

Option 1: zero

Option 2: one

Option 3: less than one

Option 4: infinite


Team Careers360 1st Jan, 2024
Answer (1)
Team Careers360 9th Jan, 2024

Correct Answer: infinite


Solution : The correct option is infinite.

When a demand curve is perfectly horizontal, it signifies that the quantity demanded remains unaltered regardless of shifts in price. It indicates an infinite price elasticity of demand. In practical terms, infinite price elasticity of demand suggests that even the slightest change in price will lead to an infinite change in the quantity demanded.

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