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    Question

    Price elasticity of demand of a horizontal demand curve

    is called:
    A Perfectly elastic Correct Answer Incorrect Answer
    B Perfectly inelastic Correct Answer Incorrect Answer
    C Elastic Correct Answer Incorrect Answer
    D Inelastic Correct Answer Incorrect Answer

    Solution

    A horizontal demand curve depicts perfect elasticity. This means any slightest change in price can result in an infinite change in QD. Thus, the PED is infinity.

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