Advertisements
Advertisements
Question
Which is the implication of a horizontal demand curve?
Options
Perfectly elastic demand
Perfectly inelastic demand
Inelastic demand
Elastic demand
Solution
Perfectly elastic demand
Explanation:
A horizontal demand curve implies that the demand is perfectly elastic, meaning that consumers will buy any quantity of the good at a specific price. Still, if the price changes even slightly, the quantity demanded will drop to zero.
APPEARS IN
RELATED QUESTIONS
If elasticity of demand for salt is zero, and household demands 2 kg. of salt during one month when its price is ₹ 5 per kg., this household will demand the same quantity of salt even if price rises to ₹ 8 per kg.
Match the following and select the correct option.
| Column I | Column II | ||
| (i) | Perfectly elastic demand | A. | Ed = 0 |
| (ii) | Perfectly inelastic demand | B. | Ed = ∞ |
| (iii) | Relatively elastic demand | C. | Ed < 1 |
| (iv) | Relatively inelastic demand | D. | Ed > 1 |
Would the elasticity of demand in the following case be unity, less than unity or greater than unity?
A rise in the price of a commodity reduces the total expenditure.
Would the elasticity of demand in the following case be unity, less than unity or greater than unity?
A rise in the price of a commodity increases total expenditure.
Would the elasticity of demand in the following case be unity, less than unity or greater than unity?
A fall in the price of a commodity increases total expenditure.
Indicate the degree of elasticity of demand of the following demand curves.
When is the demand of a commodity said to be inelastic?
What is price elasticity of demand for life saving drugs?
Why is market demand curve more elastic than an individual demand curve?
What is the price elasticity of demand for the following demand curve:
Rectangular hyperbola.
