-Refer to Exhibit 5.2. 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 5.2, which graph illustrates the shape of the demand curve for silver?
A) Graph A.
B) Graph B.
C) Graph C.
D) Graph D.

Question

-Refer to Exhibit 5.2. 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 5.2, 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 is a straight vertical line, indicating that no matter what the price of silver is, Mr Hunt is willing to purchase any amount at a fixed price of $125 an ounce. This is a perfect example of a vertical demand curve, which is also known as a perfectly elastic demand curve.