If the demand is perfectly elastic, what would happen to the quantity demanded if there is a tiny increase in price?
A)quantity demanded will increase proportionately
B)quantity demanded will fall to zero
C)quantity demanded will register a disproportionately high increase
D)quantity demanded will decrease proportionately

Question

If the demand is perfectly elastic, what would happen to the quantity demanded if there is a tiny increase in price?
A)​quantity demanded will increase proportionately
B)​quantity demanded will fall to zero
C)​quantity demanded will register a disproportionately high increase
D)​quantity demanded will decrease proportionately

Quizplus · Accepted Answer

If the demand is perfectly elastic, any increase in price would cause consumers to switch to a close substitute, resulting in a complete loss of demand for the original product. Hence, the quantity demanded would fall to zero.

If the Demand Is Perfectly Elastic, What Would Happen to the Quantity