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Question
When the price elasticity of demand for a good equals ______.
Options
0, the demand cure is horizontal
1, the demand curve is vertical
1, the demand curve is horizontal
0, the demand curve is vertical
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Solution
When the price elasticity of demand for a good equals 0, the demand curve is vertical.
Explanation:
When the price elasticity of demand for a good equals 0, the demand curve is vertical, indicating that the quantity demanded does not change regardless of the price. This situation represents perfectly inelastic demand.
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