If the demand for a product is perfectly elastic,then which of the following is most likely to be FALSE?
A) The product has many substitutes.
B) The demand curve for the good is horizontal.
C) The price elasticity of demand for that product is infinity.
D) None of the above is false.

Question

Quizplus · Accepted Answer

In the case of perfectly elastic demand, all the statements provided are true: the product indeed has many substitutes (A is true), the demand curve is horizontal reflecting that any price increase will result in the demand dropping to zero (B is true), and the price elasticity of demand is infinity, indicating that consumers are extremely sensitive to price changes (C is true). Therefore, none of the statements is false.

If the Demand for a Product Is Perfectly Elastic,then Which