Perfectly elastic


What is "perfectly elastic"?
Perfectly elastic is literally a horizontal is really in theory only, but the idea is that the good is so sensitive to price changes that even a change in price of one penny would cause demand to rise or fall a lot. Highly elastic is not quite a horizontal line (for the demand curve), but close to it. Very sensitive to price changes, but not quite as sensitive as perfectly elastic. In the real world, highly elastic goods absolutely exist. Perfectly elastic is really only in theory!