Question : The price elasticity of demand for a perfectly elastic demand curve is:
Option 1: 0
Option 2: 1
Option 3: Greater than 1
Option 4: Infinite
Answer (1)
20th Jan, 2024
Correct Answer: Infinite
Solution : The correct answer is (d) Infinite
The price elasticity of demand for a perfectly elastic demand curve is infinite. A perfectly elastic demand curve is a horizontal line, indicating that consumers are extremely responsive to changes in price. Even a small change in price will result in an infinitely large change in quantity demanded. Therefore, the price elasticity of demand is infinite in this case.
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