Economics Elasticity Of Demand Questions Medium
The price elasticity of demand for a perfectly elastic good is infinite. This means that a small change in price will result in an infinitely large change in quantity demanded. In other words, consumers are extremely responsive to changes in price, and any increase in price will cause demand to drop to zero, while any decrease in price will cause demand to increase to infinity. This type of demand is often seen in markets where there are many close substitutes available, and consumers can easily switch between different products based on price changes.