If the own price elasticity of demand is infinite in absolute value,then:
A) demand is perfectly inelastic.
B) the demand curve is horizontal.
C) consumers do not respond at all to changes in price.
D) demand is neither perfectly inelastic nor is the demand curve horizontal.

Question

Quizplus · Accepted Answer

A price elasticity of demand of infinity means that even the slightest change in price will lead to a complete change in quantity demanded. This indicates an almost horizontal demand curve which is perfectly elastic. Therefore, the best choice is B- the demand curve is horizontal.

If the Own Price Elasticity of Demand Is Infinite in Absolute