If demand is perfectly elastic, the absolute value of the price elasticity coefficient is
A) infinity.
B) zero.
C) more than one.
D) equal to the absolute value of the slope of the demand curve.

Question

Quizplus · Accepted Answer

When demand is perfectly elastic, a small change in the price will result in an infinite change in the quantity demanded. This means that the percentage change in quantity demanded would be infinitely greater than the percentage change in price, making the absolute value of the price elasticity coefficient infinity.

If Demand Is Perfectly Elastic, the Absolute Value of the Price