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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


Team Careers360 13th Jan, 2024
Answer (1)
Team Careers360 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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