Suppose the price elasticity of demand for a Czech novel translated into English is perfectly elastic

Economics Dec 18, 2020

Suppose the price elasticity of demand for a Czech novel translated into English is perfectly elastic. Assume the initial price of the translated novel is $29.00 and the quantity demanded is 411 copies for year. If the price of the translated novel increases by $1.00, then what will be the quantity demanded (in copies per year)?

Expert Solution

When demand is perfectly elastic, quantity demanded will drop to zero even for a small increase in price. In other words, the demand curve is horizontal when price is plotted on the vertical axis. Therefore, in this case, if the price of book is $1 higher, then quantity demanded is zero.

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