When demand is perfectly elastic:
A) the demand curve is perfectly vertical.
B) the demand curve is perfectly horizontal.
C) price elasticity is exactly −1.
D) the response to a change in price is immediate.

Question

Quizplus · Accepted Answer

When demand is perfectly elastic, a small change in price will cause buyers to completely abandon the good, leading to zero quantity demanded at the original price. This means that the demand curve is perfectly horizontal, indicating that buyers are willing to buy any quantity of the good at the market price.

When Demand Is Perfectly Elastic