A perfectly elastic demand curve has a price elasticity of demand coefficient of:
A) zero.
B) infinity.
C) greater than 1, but less than infinity.
D) less than 1, but greater than zero.

Question

Quizplus · Accepted Answer

A perfectly elastic demand curve means that any increase in price will cause consumers to completely stop purchasing the product, resulting in an infinite responsiveness to price changes. Therefore, the price elasticity of demand coefficient would equal infinity.

A Perfectly Elastic Demand Curve Has a Price Elasticity of Demand