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Question
When the price elasticity of demand for a good equals ______.
Options
0, the demand cure is horizontal
1, the demand curve is vertical
1, the demand curve is horizontal
0, the demand curve is vertical
Solution
When the price elasticity of demand for a good equals 0, the demand curve is vertical.
Explanation:
When the price elasticity of demand for a good equals 0, the demand curve is vertical, indicating that the quantity demanded does not change regardless of the price. This situation represents perfectly inelastic demand.
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