A horizontal demand curve is ______.

relatively elastic

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perfectly inelastic

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perfectly elastic

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unitary elasticity

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Solution

The correct option is C perfectly elastic
A perfectly elastic demand curve is represented by a straight horizontal line and shows that the market demand for a product is directly tied to the price. In fact, the demand is infinite at a specific price. Thus, a change in price would eliminate all demand for the product.

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Similar questions

Elasticity of demand is different at different points of a demand curve, unless demand curve is a rectangular hyperbola.

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