Perfectly Elastic Demand

Perfectly elastic demand occurs when consumers will buy an unlimited amount of a product at a specific price, but none at any higher price. This means even a tiny increase in price causes the quantity demanded to drop to zero, while a tiny decrease in price leads to infinite demand. It implies consumers are extremely sensitive to price changes and have perfect substitutes available. In reality, perfectly elastic demand is rare, but it helps illustrate how demand can react intensely to price shifts when products are perfectly interchangeable.