Suppose the demand for peaches sold from one roadside stand in Georgia is perfectly elastic.As a result,a 7 percent increase in the price charged by the owner of this stand leads to
A) zero peaches sold by this stand.
B) no change in the quantity demanded at this stand.
C) a 7 percent decrease in the quantity demanded at this stand.
D) a 7 percent decrease in demand at this stand.
E) a virtually infinite increase in the quantity demanded at this stand.

Question

Quizplus · Accepted Answer

Since the demand for peaches sold from this roadside stand is perfectly elastic, any increase in price will lead to a complete loss of customers. Thus, the quantity demanded will be zero, leading to choice A as the correct answer.

Suppose the Demand for Peaches Sold from One Roadside Stand