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Degrees of Elasticity
Degrees of Elasticity
Degrees of Elasticity
Degrees of elasticity
The degree of elasticity describes how responsive quantity demanded is to changes
in price. It is the range of possible elasticity of demand coefficients for a good or
service.
Elastic – If quantity demanded is very responsive to a change in price.
Inelastic – If quantity demanded is very unresponsive to changes in price.
Degrees of elasticity of Meaning Elasticity of demand
demand coefficient
Perfectly inelastic
The percentage of change in quantity demanded is less than the percentage change
in price 0 < PED < 1
Unitary elasticity
The percentage change in quantity demanded is greater than the percentage change
in price. 1 < PED < infinity
Perfectly elastic