Economics – Price elasticity, income elasticity and cross elasticity of demand | e-Consult

A perfectly elastic demand curve is horizontal. This means that consumers will purchase any quantity of a good at a specific price. If the price increases even slightly, demand drops to zero. The demand is infinitely responsive to price changes.

This is a theoretical extreme because it's highly unlikely to occur in the real world. Even at a very low price, consumers will likely still desire *some* quantity of a good. There will always be some level of willingness to pay.

A real-world example that approximates perfectly elastic demand is a perfectly competitive market where there are many sellers and identical products. If one seller raises their price, consumers will simply switch to another seller offering the same product at the lower price. The individual demand curve for a product in such a market would be essentially horizontal.