A horizontal straight line demand curve shows zero elasticity of demand.

True

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False

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Solution

The correct option is B False
False. A horizontal straight line demand curve parallel to X-axis shows infinite elasticity of demand $(E_{d} = \infty)$ . Because, slope of a horizontal straight line=0.
So that, $E_{d} = \frac{1}{S l o p e o f d e m a n d c u r v e} \times \frac{P}{Q}$
$= \frac{1}{0} \times \frac{P}{Q} = \infty$

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A vertical straight line demand curve shows that demand rises to infinity even when price remains constant.

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