Q.Write a short note on: Perfectly elastic demand

Perfectly elastic demand means an infinite response of quantity demanded to price: at one particular price consumers buy as much as is offered, but any rise in price makes demand fall to zero. Its coefficient of elasticity is infinity and the demand curve is a horizontal line parallel to the X-axis.

Meaning

Perfectly (or infinitely) elastic demand is the extreme case of elastic demand. Here consumers are willing to buy any quantity of the good at the prevailing price, but they will buy nothing if the price rises even slightly. Thus a very small change in price causes an infinitely large change in quantity demanded.

• The coefficient of price elasticity of demand is infinity.
• The demand curve is a horizontal straight line parallel to the X-axis (the quantity axis), because the quantity can vary at the same price. …