If a small change in price will lead to an infinite change in the quantity demanded, then the demand curve is:
A)Perfectly elastic.
B)Perfectly inelastic.
C)Downward sloping.
D)non-linear

Question

If a small change in price will lead to an infinite change in the quantity demanded, then the demand curve is:
A)​Perfectly elastic.
B)​Perfectly inelastic.
C)​Downward sloping.
D)​non-linear

Quizplus · Accepted Answer

When a small change in price causes an infinite change in the quantity demanded, it implies that consumers are extremely sensitive to price changes and are willing to buy any quantity at the slightest drop in price. This situation is known as perfectly elastic demand, where a small change in price leads to an infinite change in the quantity demanded. In this case, the demand curve is horizontal because any increase in price will cause quantity demanded to fall to zero, and any decrease in price will result in an infinite increase in quantity demanded.

If a Small Change in Price Will Lead to an Infinite