Question

Name the types of elasticity of demand.

Answer 1

Types of elasticity of demand are:

1) Demand curve is parallel to X- axis n case of perfectly elastic demand. A perfectly elastic demand refers to the situation when demand is infinite at the prevailing price.

2) Demand curve is parallel to Y- axis n case of perfectly inelastic demand. A perfectly inelastic demand refers to the situation when demand does not change with the change in the price.

3) Unitary elastic demand refers to the situation when proportionate change in quantity demand is equal to the proportionate change in price.

4) Relatively elastic demand refers to the situation when proportionate change in quantity demand is greater than the proportionate change in price.

5) Relatively inelastic demand refers to the situation when proportionate change in quantity demand is lesser than the proportionate change in price.