A good with perfectly elastic demand is best described by which statement?

A good with perfectly elastic demand is best described by which statement?

• A. A tiny price decrease causes the quantity demanded to become zero.
• B. Price changes do not affect quantity demanded.
• C. A tiny price increase causes the quantity demanded to fall to zero.
• D. Quantity demanded is always fixed.

Answer: (C)

Perfectly elastic demand is shown by a horizontal demand curve: buyers are willing to purchase any quantity at a specific price, but even a tiny rise in price drives quantity demanded to zero. So the statement that a small price increase causes the quantity demanded to fall to zero captures this behavior. The other options describe outcomes that don’t fit a perfectly elastic pattern—price decreases wouldn’t wipe out demand, price changes do affect demand, and quantity demanded isn’t fixed.

Perfectly elastic demand is shown by a horizontal demand curve: buyers are willing to purchase any quantity at a specific price, but even a tiny rise in price drives quantity demanded to zero. So the statement that a small price increase causes the quantity demanded to fall to zero captures this behavior. The other options describe outcomes that don’t fit a perfectly elastic pattern—price decreases wouldn’t wipe out demand, price changes do affect demand, and quantity demanded isn’t fixed.