A demand curve that is parallel to the horizontal axis is
A) perfectly inelastic.
B) perfectly elastic.
C) relatively inelastic.
D) relatively elastic.

Question

Quizplus · Accepted Answer

A demand curve that is parallel to the horizontal axis is perfectly elastic, meaning that any change in price will cause an infinite change in the quantity demanded. This is because consumers are highly sensitive to price and are willing to switch to a substitute product if the price of the original product changes even slightly.

A Demand Curve That Is Parallel to the Horizontal Axis