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Question
True or False with Reason:
In case of horizontal straight line demand curve, demand does not change even with change in price.
True or False
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Solution
This statement is false.
Explanation:
- A horizontal straight line demand curve represents perfectly elastic demand, where price elasticity of demand is infinity.
- At a given price, demand is infinite, and even a slight rise in price reduces demand to zero.
- So demand changes drastically with a change in price, not remains unchanged.
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