A product with infinite elasticity has a horizontal demand curve.

A product with infinite elasticity has a horizontal demand curve.

• A. Vertical
• B. Horizontal
• C. Upward-sloping
• D. Downward-sloping

Answer: (B)

Perfectly elastic demand means consumers are infinitely responsive to price changes. At the given price, buyers will purchase as much as they want, but they will not pay even a tiny bit more. Graphically, that infinite responsiveness shows up as a horizontal demand curve: the price is fixed across all quantities demanded at that level. If the price rises even slightly, demand collapses; if it falls, quantity demanded can increase dramatically while the price remains the same. This is why a product with infinite elasticity is represented by a horizontal curve. The vertical curve would imply zero elasticity (quantity doesn’t change with price), and a typical downward-sloping curve indicates finite elasticity. An upward-sloping curve would imply unusual, nonstandard behavior.

Perfectly elastic demand means consumers are infinitely responsive to price changes. At the given price, buyers will purchase as much as they want, but they will not pay even a tiny bit more. Graphically, that infinite responsiveness shows up as a horizontal demand curve: the price is fixed across all quantities demanded at that level. If the price rises even slightly, demand collapses; if it falls, quantity demanded can increase dramatically while the price remains the same. This is why a product with infinite elasticity is represented by a horizontal curve. The vertical curve would imply zero elasticity (quantity doesn’t change with price), and a typical downward-sloping curve indicates finite elasticity. An upward-sloping curve would imply unusual, nonstandard behavior.