What is the Price Elasticity of Demand (PED) for a perfectly elastic demand curve?

The Price Elasticity of Demand (PED) for a perfectly elastic demand curve is represented as infinity (∞). This indicates that consumers are completely sensitive to price changes. In a perfectly elastic scenario, even a tiny increase in the price will result in the quantity demanded falling to zero, while a price decrease would lead to an infinite increase in the quantity demanded.

This characteristic is typical in markets where substitutes are readily available, forcing consumers to react strongly to any changes in price. Therefore, the demand curve for such a product is horizontal, reflecting that the price remains constant regardless of the quantity demanded, provided the price stays at a certain level. A PED of infinity highlights the extreme nature of responsiveness in this case, distinguishing it dramatically from other elasticity measures.