Exhibit 5-4 Demand curves for silver

-Assume that a wealthy buyer, Mr. Hunt, declares that he will purchase any amount of silver at a price of $125 an ounce. In Exhibit 5-4, which graph illustrates the shape of the demand curve for silver?
A) Graph A.
B) Graph B.
C) Graph C.
D) Graph D.

Question

Exhibit 5-4 Demand curves for silver
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-Assume that a wealthy buyer, Mr. Hunt, declares that he will purchase any amount of silver at a price of $125 an ounce. In Exhibit 5-4, which graph illustrates the shape of the demand curve for silver?
A) Graph A. 
B) Graph B. 
C) Graph C. 
D) Graph D.

Quizplus · Accepted Answer

Graph A illustrates a perfectly elastic demand curve, where any amount of silver will be purchased at a fixed price of $125 an ounce. This is consistent with Mr. Hunt's declaration to purchase any amount at that price.

Exhibit 5-4 Demand Curves for Silver