When small changes in price lead to infinite changes in quantity demanded, demand is perfectly
A)elastic, and the demand curve will be horizontal.
B)inelastic, and the demand curve will be horizontal.
C)elastic, and the demand curve will be vertical.
D)inelastic, and the demand curve will be vertical.

Question

Quizplus · Accepted Answer

Perfectly elastic demand means that consumers are extremely sensitive to price changes, so even a tiny price change can lead to an infinitely large change in the quantity demanded. This situation is represented graphically by a horizontal demand curve, indicating that at a certain price, consumers will demand any quantity.

When Small Changes in Price Lead to Infinite Changes in Quantity