Question : Assertion: The price elasticity of demand for a perfectly elastic demand curve is infinity.
Reason: A perfectly elastic demand curve is horizontal, indicating that the quantity demanded becomes infinite at a specific price.
Option 1: Both the assertion and reason are correct and related.
Option 2: Both the assertion and reason are correct but not related.
Option 3: The assertion is correct, but the reason is incorrect.
Option 4: The assertion is incorrect, but the reason is correct.
Correct Answer: Both the assertion and reason are correct and related.
Solution : The correct answer is (A) Both the assertion and reason are correct and related.
The assertion is correct because the price elasticity of demand for a perfectly elastic demand curve is indeed infinite. In a perfectly elastic demand curve, even the slightest increase in price will lead to an infinite decrease in quantity demanded, and vice versa. This indicates an infinitely responsive demand to price changes.
The reason provided is also correct. A perfectly elastic demand curve is represented by a horizontal line, indicating that consumers are willing to purchase any quantity at a specific price. Since the quantity demanded becomes infinite at that price, it supports the assertion that the price elasticity of demand for a perfectly elastic demand curve is infinity.
Therefore, both the assertion and reason are correct and related.
Reason: A perfectly elastic demand curve is horizontal, indicating that quantity demanded becomes infinite at a specific price.
Question : Assertion: The price elasticity of demand for a perfectly inelastic demand curve is zero.
Reason: A perfectly inelastic demand curve is vertical, indicating that quantity demanded does not change regardless of price changes.
Question : Assertion: The concept of price elasticity of demand is not applicable to goods with perfectly elastic demand.
Reason: Perfectly elastic demand means that any increase in price will cause quantity demanded to drop to zero, making the concept of elasticity irrelevant.
Question : Assertion: The demand for a product is perfectly inelastic when quantity demanded remains constant regardless of price changes.
Reason: Perfectly inelastic demand occurs when the price elasticity of demand is zero.
Question : Assertion: The price elasticity of demand for a product can vary along its demand curve.
Reason: The price elasticity of demand depends on the slope and shape of the demand curve.
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