Multiple choice

In case of perfectly elastic goods, the impact of a rise in price will be

  1. stability in demand

  2. decrease in demand

  3. increase in demand

  4. constantly changing
Reveal answer Fill a bubble to check yourself
B Correct answer
Explanation

For perfectly elastic goods, demand is extremely sensitive to price changes. Any price increase causes demand to fall to zero because consumers can easily switch to substitutes or simply stop buying. This contrasts with inelastic goods where demand remains stable despite price changes.

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