Asked by Nuwan Maddumage Don on Jul 28, 2024
Verified
The price elasticity of demand for alfalfa is perfectly elastic. Thus, the price elasticity demand for alfalfa is
A) 1.0.
B) 0.0.
C) -1.0.
D) infinity.
Price Elasticity
A measure of how much the quantity demanded of a good responds to a change in its price, indicating the sensitivity of consumers to price changes.
Perfectly Elastic
Describes a situation in economics where the quantity demanded or supplied responds infinitely or extremely to a change in price.
- Differentiate between entirely inelastic demand and completely elastic demand.
Verified Answer
SR
Samuel RezendeJul 31, 2024
Final Answer :
D
Explanation :
When demand is perfectly elastic, the price elasticity of demand is infinite, indicating that any change in price will lead to an infinite change in the quantity demanded.
Learning Objectives
- Differentiate between entirely inelastic demand and completely elastic demand.