ECONOMICS (CBSE/UGC NET)

Detailed explanation-1: -If the curve is perfectly flat (horizontal), then we say that it is perfectly elastic. Luxury goods are often very elastic – if the price increases a little, then people will move over to something else. Remember that the elasticity is a ratio of percent changes in quantity and price.

Detailed explanation-2: -A perfectly elastic demand curve will be a straight line (horizontal) on a graph, where the x-axis will be the quantity, and the y-axis will be the price of the product. The market demand for a product is directly tied to the price of the product.

Detailed explanation-3: -Figure %: Elastic and Inelastic Curves At the extremes, a perfectly elastic curve will be horizontal, and a perfectly inelastic curve will be vertical.

Detailed explanation-4: -Perfectly elastic: When there is an extreme change in the demand for a good when the price falls or rises, the supply curve is a horizontal line. This shows that if the price increases there will be almost zero demand, and if the price decreases there would be almost infinite demand.

Detailed explanation-5: -Answer and Explanation: A horizontal demand curve represents demand that is perfectly elastic. That is, consumers will only purchase the good at a given price, and will purchase zero when the price is above the given price.