Price Elasticity of Demand

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Price elasticity of demand formula

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Characteristics of the D curve in perfectly inelastic demand

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Vertical line

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Consumers’ price sensitivity in perfectly inelastic demand

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None

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Elasticity in perfectly inelastic demand

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Elasticity = 0

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Inelastic demand occurs when

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the percentage change in quantity demanded is less than the percentage change in price, resulting in an elasticity of less than 1.

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Characteristics of inelastic demand

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In inelastic demand, a 10% decrease in price results in a less than 10% increase in quantity demanded.

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Consumer price sensitivity in inelastic demand

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Consumers are less sensitive to price changes in inelastic demand situations.

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D curve

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The D curve represents the demand curve on a graph, showing the relationship between price and quantity demanded.

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Consumers’ price sensitivity in unit elastic demand

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In unit elastic demand, consumers' price sensitivity is such that a 10% decrease in price leads to a 10% increase in quantity demanded.

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Elasticity value in unit elastic demand

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The elasticity value in unit elastic demand is 1.