If the demand for cream cheese produced by a dairy is perfectly elastic,then what will be the shape of the demand curve faced by the dairy?
A)The demand curve will be vertical
B)The demand curve will be horizontal
C)The demand curve will be upward sloping
D)The demand curve will be downward sloping
E)The demand curve will be concave

Question

Quizplus · Accepted Answer

A perfectly elastic demand means that consumers are willing to buy any quantity of cream cheese at a fixed price. As a result, the demand curve will be horizontal, as the dairy can sell any amount of cream cheese at the same price without affecting the quantity demanded.

If the Demand for Cream Cheese Produced by a Dairy