Perfectly Elastic

Definition

Perfectly elastic refers to a situation where even a small change in price leads to an infinite change in quantity demanded or supplied. In other words, demand or supply is extremely sensitive to changes in price.

Related terms

Price Elasticity of Demand (PED): A measure of how much quantity demanded responds to changes in price.

Substitutes: Goods that can be used as alternatives for each other.

Cross Elasticity of Demand (XED): A measure of how much the demand for one good responds to changes in the price of another good.