If the demand curve is a horizontal line,
A)demand is perfectly elastic
B)demand is perfectly inelastic
C)demand is unitary elastic
D)demand is relatively inelastic
E)total expenditure is maximized

Question

Quizplus · Accepted Answer

When the demand curve is a horizontal line, it means that any change in price will cause a significant change in quantity demanded. In other words, consumers are very sensitive to changes in price, and they are willing to switch to other substitutes if the price of a product increases even a little bit. This is known as perfectly elastic demand.

If the Demand Curve Is a Horizontal Line