A product with infinite elasticity has a horizontal demand curve.

• A. Vertical
• B. Horizontal
• C. Upward-sloping
• D. Downward-sloping

Answer: (B)

Perfectly elastic demand means consumers are infinitely responsive to price changes. At the given price, buyers will purchase as much as they want, but they will not pay even a tiny bit more. Graphically, that infinite responsiveness shows up as a horizontal demand curve: the price is fixed across all quantities demanded at that level. If the price rises even slightly, demand collapses; if it falls, quantity demanded can increase dramatically while the price remains the same. This is why a product with infinite elasticity is represented by a horizontal curve. The vertical curve would imply zero elasticity (quantity doesn’t change with price), and a typical downward-sloping curve indicates finite elasticity. An upward-sloping curve would imply unusual, nonstandard behavior.