Demand is perfectly elastic when the absolute value of the own price elasticity of demand is:
A) zero.
B) one.
C) infinite.
D) unknown.

Question

Quizplus · Accepted Answer

When the own price elasticity of demand is infinite, a small change in price will result in an infinite change in quantity demanded. This means that consumers are extremely responsive to price changes and will stop purchasing the good if the price increases even slightly. Therefore, demand is perfectly elastic.

Demand Is Perfectly Elastic When the Absolute Value of the Own