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Question & Answer
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The demand curve is vertical, indicating that consumers will purchase the same quantity regardless of price changes.
The demand curve is horizontal, suggesting that consumers are highly responsive to price changes.
The demand curve is downward sloping, reflecting a typical consumer behavior where quantity demanded increases as price decreases.
The demand curve is upward sloping, indicating that higher prices lead to higher quantities demanded.
Understanding the Answer
Let's break down why this is correct
A horizontal line shows that price stays fixed while quantity can change a lot. Other options are incorrect because A vertical line would mean quantity never changes, no matter the price; A downward slope is the usual demand curve, but it is not perfectly elastic.
Key Concepts
Price Elasticity of Demand
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Deep Dive: Price Elasticity of Demand
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Definition
Price elasticity of demand measures the responsiveness of quantity demanded to changes in price. It quantifies how much the quantity demanded will change in percentage terms in response to a one percent change in price. Elasticity values help determine the sensitivity of demand to price fluctuations.
Topic Definition
Price elasticity of demand measures the responsiveness of quantity demanded to changes in price. It quantifies how much the quantity demanded will change in percentage terms in response to a one percent change in price. Elasticity values help determine the sensitivity of demand to price fluctuations.
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