Asked by Leticia Miranda on Jul 04, 2024
Verified
When small changes in price lead to infinite changes in quantity demanded, demand is perfectly
A) elastic, and the demand curve will be horizontal.
B) inelastic, and the demand curve will be horizontal.
C) elastic, and the demand curve will be vertical.
D) inelastic, and the demand curve will be vertical.
Perfectly Elastic
This describes a situation where a small change in price leads to an infinite change in the quantity demanded or supplied.
Demand Curve
A graph showing the relationship between the price of a good and the quantity of the good that consumers are willing and able to purchase at various prices.
- Differentiate among perfectly elastic, perfectly inelastic, elastic, unit elastic, and inelastic types of demand.
Verified Answer
JM
Jasmyne McGeeJul 05, 2024
Final Answer :
A
Explanation :
Perfectly elastic demand means that consumers are extremely sensitive to price changes, so even a tiny price change can lead to an infinitely large change in the quantity demanded. This situation is represented graphically by a horizontal demand curve, indicating that at a certain price, consumers will demand any quantity.
Learning Objectives
- Differentiate among perfectly elastic, perfectly inelastic, elastic, unit elastic, and inelastic types of demand.