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Question
Which is the implication of a horizontal demand curve?
Options
Perfectly elastic demand
Perfectly inelastic demand
Inelastic demand
Elastic demand
MCQ
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Solution
Perfectly elastic demand
Explanation:
A horizontal demand curve implies that the demand is perfectly elastic, meaning that consumers will buy any quantity of the good at a specific price. Still, if the price changes even slightly, the quantity demanded will drop to zero.
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