For a perfectly elastic demand curve,a 10% increase in price causes
A) A 10% increase in quantity demanded
B) A 10% decrease in quantity demanded
C) An increase in quantity demanded to infinity
D) A decrease of quantity demanded to zero
E) No change in quantity demanded

Question

Quizplus · Accepted Answer

For a perfectly elastic demand curve, a 10% increase in price will lead to an infinite decrease in quantity demanded, meaning that consumers will completely stop buying the product. This is because any increase in price will cause all consumers to switch to a substitute product that is cheaper, as the demand curve is so sensitive to price changes.

For a Perfectly Elastic Demand Curve,a 10% Increase in Price