What is a demand curve that is parallel to the horizontal axis?

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1. A demand curve, which is parallel to the horizontal axis, showing quantity, has the price elasticity equal to
   

1. 1. Zero
      
   2. One
      
   3. Less than one
      
   4. Infinity

Price elasticity of demand measures consumer response to price changes. If consumers are relatively sensitive to price changes, demand is elastic; if they are relatively unresponsive to price changes, demand is inelastic. Perfectly inelastic demand is graphed as a line parallel to the vertical axis; perfectly elastic demand is shown by a line above and parallel to the horizontal axis. When the demand for a commodity is perfectly elastic, the quantity of demand keeps changing with the price. So the coefficient of price elasticity of demand is infinity.

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1. Equals to 1
2. Equals to -1
3. Infinite
4. Equals to 0

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• The horizontal demand curve parallel to the x-axis implies that the elasticity of demand is infinite.
• The demand curve illustrates the relationship between price and quantity demanded of a particular good or service. 
• The elasticity measures the extent to which a change in price affects the quantity demanded of that particular good or service.
• In the case of a product with a horizontal demand curve, the elasticity of demand is said to be perfectly elastic.
• Perfectly elastic demand is a demand where any price increase would cause the quantity demanded to fall to zero, and reducing the price of a good or service will not increase sales.
• Luxury goods are often very elastic – if the price increases a little, then people will move over to something else.

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