If demand is perfectly elastic, the absolute value of the price elasticity coefficient is
A)infinity.
B)zero.
C)one.
D)equal to the absolute value of the slope of the demand curve.

Question

Quizplus · Accepted Answer

If demand is perfectly elastic, it means that a small change in price will lead to an infinite change in quantity demanded. This implies that the percentage change in quantity demanded will be infinitely large compared to a percentage change in price. Therefore, the absolute value of the price elasticity coefficient (the ratio of percentage change in quantity demanded to percentage change in price) will be infinitely large, making option A the correct answer.

If Demand Is Perfectly Elastic, the Absolute Value of the Price