Question

A perfectly elastic demand is one in which the: Multiple Choice demand curve is perfectly vertical....

A perfectly elastic demand is one in which the: Multiple Choice demand curve is perfectly vertical. response to a change in price is immediate. demand curve is perfectly horizontal. price elasticity is exactly -1.

Homework Answers

Answer #1

A PERFECTLY ELASTIC DEMAND IS ONE WHICH THE:-

ANS:- Demand curve is perfectly horizontal.

Explanation :-

  • Price elasticity of demand is calculated by dividing the percenatge change in Quantity demanded with percentage change in price.

  

  • The demand curve of perfectly elastic demand is horizontal to X-Axis.
  • This means that a slightest change in price will lead to major change in Quantity Demanded by the customer. A small increase in price will cause the demand to fall to zero.
  • Here demand is infinte . Elasticity is represented with Ed.

So, Ed = ∞

Graphical representation

  • P is the price.
  • Q, Q1,Q2 are the Quantity demanded at given price.
  • D is the Demand Curve. which is parallel to X-Axis.
Know the answer?
Your Answer:

Post as a guest

Your Name:

What's your source?

Earn Coins

Coins can be redeemed for fabulous gifts.

Not the answer you're looking for?
Ask your own homework help question
Similar Questions
1.Price elasticity of demand is defined as: Multiple Choice a.the slope of the demand curve. b.the...
1.Price elasticity of demand is defined as: Multiple Choice a.the slope of the demand curve. b.the slope of the demand curve divided by the price. c.the percentage change in price divided by the percentage change in quantity demanded. d.the percentage change in quantity demanded divided by the percentage change in price. 2. The Midpoint Method for Elasticity uses which of the following? Multiple Choice a.Average percentage change in price only b.Average percentage change in quantity only c.Average percentage change in...
The demand curve for a perfectly competitive firm is ______, while the demand curve for a...
The demand curve for a perfectly competitive firm is ______, while the demand curve for a monopolist is ______. Multiple Choice perfectly elastic; perfectly inelastic perfectly elastic; downward-sloping perfectly inelastic; perfectly elastic vertical; downward-sloping
1. Graphically, what does the demand curve look like when demand is perfectly elastic? When it...
1. Graphically, what does the demand curve look like when demand is perfectly elastic? When it is perfectly inelastic? 2. What is the relationship--if there is one--between the price elasticity of demand and the slope of the demand curve? 3. In the context of elasticity, how can goods be classified as "substitutes," "complements," or "independent goods?" (Hint: think about this in terms of the number values used to define elasticity.)
1) A perfectly competitive firm is said to face a perfectly elastic demand curve A. Explain...
1) A perfectly competitive firm is said to face a perfectly elastic demand curve A. Explain why the price elasticity is so high under perfect competition: B. What is the consequences of a perfectly elastic demand curve on the marginal revenue received by the individual perfect competitor? C. Based on your answers to b, state the profit optimizing rule (optimal Q) to as it applies to perfect competitors ONLY:
number 10 A perfectly competitive producer’s demand curve is: a. downward sloping but more elastic than...
number 10 A perfectly competitive producer’s demand curve is: a. downward sloping but more elastic than the market-demand curve. b. also the market-demand curve. c. upward sloping. d. a vertical line. e. a horizontal line.
Consider a market with a perfectly vertical demand curve, and a perfectly horizontal supply curve. Calculate...
Consider a market with a perfectly vertical demand curve, and a perfectly horizontal supply curve. Calculate the consumer surplus, and the producer surplus, in this market.
____ 40. The price elasticity of a vertical demand curve is always a. infinitely large. b....
____ 40. The price elasticity of a vertical demand curve is always a. infinitely large. b. zero. c. one. d. increasing as price increases. ____ 41. Along a perfectly elastic demand curve, a. the slope is always zero. b. the price elasticity of demand is 1. c. consumer purchases will not respond at all to a change in price. d. All of the above are true. ____ 42. A price cut will increase the revenue a firm receives if the...
What is perfectly elastic demand/supply? Draw a graph to represent perfectly elastic demand/supply. What is perfectly...
What is perfectly elastic demand/supply? Draw a graph to represent perfectly elastic demand/supply. What is perfectly inelastic demand/supply? Draw a graph to represent perfectly elastic demand/supply. When the price of t-shirts increases by 12 percent, the quantity of t-shirts demanded falls by 20 percent. Calculate the price elasticity of demand. Is the demand for t-shirts elastic, inelastic, or unit elastic? When the price of t-shirts falls by 30 percent, the quantity of t-shirts supplied decreases by 20 percent. Calculate the...
The demand curve facing a monopolist is: Multiple Choice downward sloping, the same as that facing...
The demand curve facing a monopolist is: Multiple Choice downward sloping, the same as that facing a perfectly competitive firm. horizontal, the same as that facing a perfectly competitive firm. upward sloping, the same as that facing a perfectly competitive firm. downward sloping, unlike the horizontal demand curve facing a perfectly competitive firm.
Describe what a perfectly elastic demand curve means. That is, what makes demand perfectly elastic?
Describe what a perfectly elastic demand curve means. That is, what makes demand perfectly elastic?