Economics · Elasticity of Demand
Assertion (A): When demand for a product is perfectly elastic, the firm can sell any quantity at a given price, but cannot raise the price without losing all customers. Reason (R): Perfectly elastic demand implies that buyers are extremely sensitive to price changes, and even a slight increase in price leads to zero quantity demanded.
Verified Solution4 OptionsUpdated: October 2026👁️1 View
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- 1A is false, but R is true
- 2A is true, but R is false
- 3Both A and R are true, but R is not the correct explanation of A
- 4Both A and R are true, and R is the correct explanation of A✓
Correct answer
Both A and R are true, and R is the correct explanation of A
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