Question

In the cose of perfect elasticity the demand curve is?

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Answer 1

Explanation:

. A perfectly (or infinitely) elastic demand curve refers to the extreme case in which the quantity demanded (Qd) increases by an infinite amount in response to any decrease in price at all. ... A perfectly elastic demand curve is horizontal,

Answer 2

Answer:

A perfectly (or infinitely) elastic demand curve refers to the extreme case in which the quantity demanded (Qd) increases by an infinite amount in response to any decrease in price at all.

Explanation:

A perfectly (or infinitely) elastic demand curve refers to the extreme case in which the quantity demanded (Qd) increases by an infinite amount in response to any decrease in price at all. Similarly, quantity demanded drops to zero for any increase in the price. A perfectly elastic demand curve is horizontal, as shown in Figure 2, below. While it’s difficult to think of real world example of infinite elasticity, it will be important when we study perfectly competitive markets. It’s a situation where consumers are extremely sensitive to changes in price. Say, for example, if the price of cruises to the Caribbean decreased, everyone would buy tickets (i.e., quantity demanded would increase to infinity), or when the price of cruises to the Caribbean increased, not a single person would be on the boat (i.e., quantity demanded would decrease to zero). Perfectly elastic demand is an “all or nothing” thing!

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