Suppose demand can be written as P = 5.The elasticity of demand is)
A) increasing as price rises.
B) decreasing as price rises.
C) constant regardless of prices and perfectly elastic.
D) constant regardless of prices and unit elastic.

Question

Quizplus · Accepted Answer

Demand is said to be perfectly elastic when there is an infinite response in the quantity demanded due to any change in price. The given demand function, P = 5, represents a perfectly elastic demand because no matter what the price is, the quantity demanded remains constant at 5. Therefore, the elasticity of demand is constant regardless of prices and perfectly elastic.

Suppose Demand Can Be Written as P = 5