The figure given below shows the demand curves for five products: A, B, C, D, and E.Figure 6.1

-Refer to Figure 6.1. The value of the coefficient of price elasticity of demand for E is:
A)equal to infinity.
B)equal to 1.
C)equal to zero.
D)less than 1.
E)greater than zero but less than one.

Question

The figure given below shows the demand curves for five products: A, B, C, D, and E.Figure 6.1
 
-Refer to Figure 6.1. The value of the coefficient of price elasticity of demand for E is:
A)equal to infinity. 
B)equal to 1. 
C)equal to zero. 
D)less than 1. 
E)greater than zero but less than one.

Quizplus · Accepted Answer

The demand curve for product E is perfectly horizontal (i.e., a small change in price will result in an infinite change in quantity demanded), which means the price elasticity of demand is equal to infinity.

The Figure Given Below Shows the Demand Curves for Five