Which of the following best describes a good with perfectly elastic demand?

• A. Demand curve is vertical.
• B. Consumers will buy the same quantity regardless of price.
• C. Consumers will buy any quantity at a specific price, but none at other prices.
• D. A small change in price leads to a small change in quantity demanded.

Answer: (C)

Verified step by step guidance

1. Understand the concept of elasticity of demand: Elasticity measures how much the quantity demanded of a good responds to a change in its price.
2. Recall that perfectly elastic demand means consumers are extremely sensitive to price changes; even a tiny change in price causes the quantity demanded to drop to zero or increase infinitely.
3. Visualize the demand curve for perfectly elastic demand: it is a horizontal line at a specific price level, indicating consumers will buy any quantity at that price but none at any other price.
4. Compare this with other options: a vertical demand curve represents perfectly inelastic demand (quantity demanded does not change with price), and small changes in price leading to small changes in quantity describe inelastic or unit elastic demand, not perfectly elastic.
5. Conclude that the best description of a good with perfectly elastic demand is: consumers will buy any quantity at a specific price, but none at other prices.