💼 Pre-MBA Exam Prep

A perfectly elastic demand curve is:

A Vertical
B Horizontal — any price increase above a certain level causes quantity demanded to drop to zero
C Upward sloping
D U-shaped

✓ Correct Answer: Option B

Perfectly elastic demand: horizontal line at a given price. Consumers buy any quantity at that price but nothing above it. Elasticity = infinity. Describes perfect competition for individual firm.

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