Q. A demand curve, which is parallel to the horizontal axis, showing quantity, is equal to the price elasticity of:
Answer: Infinity
Notes: 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. 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.