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Question
Fill in the blank with appropriate alternatives given below:
Perfectly elastic demand curve is ________________.
Options
horizontal to OX axis
horizontal to OY axis
flatter
steeper
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Solution
Perfectly elastic demand curve is horizontal to OX axis.
Explanation:
Demand for a good is said to be perfectly elastic when the demand is infinitely responsive to changes in price. In other words, even a small change in price brings about a large change in demand. Such a demand curve is a horizontal straight line parallel to x-axis.
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