Example of a very small price change leads to an infinite in

Example of a very small price change leads to an infinite increase in quantity demanded (Elasticity concept).

Solution

Price elasticity of demand measures the impact of change in price on quantity demanded. Very small change in price leads to the an infinite increase in quantity demanded is called perfectly elastic demand. Such example can be seen at individual level; such as farmer can sell infinite quantity of produce by decreasing price marginally. Small decrease in price would be make product cheaper relatively, thus demand rises infinitely.