A perfectly elastic demand curve is: Select one: O a. upward sloping b. downward sloping Oc....

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A perfectly elastic demand curve is: Select one: O a. upward sloping b. downward sloping Oc. horizontal O d. vertical Answers Jump to

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Answer 1

Answer #1

Answer--D-vertical.

The price elasticity of demand is defined as:

elasticity = ∂Q∂PPQ. In a diagram with price on the vertical axis and quantity on the horizontal axis, ∂Q∂P is the inverse of the slope.

Therefore, we have

elasticity of demand = ( price / quantity demanded) * (1 / slope of demand curve)

If demand is perfectly inelastic, the price elasticity of demand is 0, in which case the slope of the demand curve is infinite (or undefined). In this case, the demand curve is vertical.

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Answer 2

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