When demand is perfectly elastic,consumer surplus is
A)infinite.
B)zero.
C)1.00.
D)-1.00.
E)between zero and 1.00.

Question

Quizplus · Accepted Answer

When demand is perfectly elastic, it means consumers are extremely sensitive to price changes and will only buy at one price. At this price, the amount they are willing to pay exactly matches the market price, leaving no consumer surplus. Consumer surplus is the difference between what consumers are willing to pay and what they actually pay. In this case, there is no difference, so consumer surplus is zero.

When Demand Is Perfectly Elastic,consumer Surplus Is