Learning Path
Question & Answer1
Understand Question2
Review Options3
Learn Explanation4
Explore TopicChoose the Best Answer
A
A slight increase in the price of a luxury car leads to a drastic drop in quantity demanded.
B
The quantity demanded remains the same despite a change in the price of a basic necessity.
C
A small increase in the price of a textbook does not affect its quantity demanded.
D
A sudden increase in price does not change the quantity of a unique collectible item demanded.
Understanding the Answer
Let's break down why this is correct
Answer
Perfectly elastic demand happens when consumers are very sensitive to price changes. This means that if the price of a product increases even slightly, the quantity demanded will drop to zero. For example, imagine a farmer selling a specific type of apple at $1 each. If the price goes up to $1. 01, buyers may choose to buy apples from another farmer selling at $1 instead, leading to no sales for the first farmer.
Detailed Explanation
Perfectly elastic demand means that even a tiny price increase causes a huge drop in sales. Other options are incorrect because This option suggests that people will buy the same amount of a basic need no matter the price; This choice implies that a small price change for textbooks won't affect how many people buy them.
Key Concepts
inelastic demand
perfectly elastic demand
Topic
Elasticity Formulas and Relationships
Difficulty
medium level question
Cognitive Level
understand
Ready to Master More Topics?
Join thousands of students using Seekh's interactive learning platform to excel in their studies with personalized practice and detailed explanations.