Useful Notes on the 5 Types of Price Elasticity of Demand
Price elasticity of demand may be of five types, viz, perfectly elastic demand, perfectly inelastic demand, unitary elastic demand, Relatively less elastic demand and Relatively more elastic demand. (a) Perfectly elastic demand: Perfectly elastic demand refers to a situation when due to a very insignificant or small change in price the quantity demanded changes infinitely. In such a case the demand curve is horizontal and parallel to OX axis. In this case the value of elasticity of demand is infinite (ed = It should be remembered that cases of perfectly elastic demand are very rare in actual life and it is only a theoretical case. ADVERTISEMENTS: In the above diagram DD, is the demand curve which is of horizontal shape. (b) Perfectly inelastic demand: This is a type of elasticity…