Elasticity in demand

Perfectly inelastic

• PED=0

• Quantity demanded does not change regardless of price

• %changeQ= 0 no matter %changeP

Relatively inelastic

• %changeQ is less than %changeP

• Quantity demanded changes less than proportionally to price change

• 0< PED ,1

Unitary elastic

• PED=1

• Quantity demanded change exactly proportionally to price change

• %changeQ=&changeP

Relatively elastic

• PED>1

• Quantity demanded changes mora than proportionally to price change

• %changeQ>%changeP

Perfectly elastic

• PED =INFINITO

• Consumers buy only at one price; slightest change=no demand

• %changeQ is infinite if %changeP> 0

Perfectly inelastic example

Essential medicine, rice in a famine - demand remains constant

Relatively inelastic example

Staple foods like maize in rural areas

Unitary elastic example

Agricultural goods in competitive markets where total revenue stays constant

Relatively elastic

Luxury goods or goods with substitutes (electronics)

Perfectly elastic

Commodities in perfect competition