Perfectly Elastic / Perfectly Inelastic? (1 Viewer)

[drewgcn]

Can someone explain how these conditions (perfectly elastic and perfectly inelastic) would work?

Pre-emptive thanks.

 

[tempco]

elastic - a change in the independant variable (e.g. price) results in a large change in the dependant variable (e.g. demand). for example, cornetto. if the price of cornetto increased, people would buy drumstick, decreasing demand for cornetto.

inelastic - a change in the independant variable (e.g. price) results in a small change in the dependant variable (e.g. demand). for example, petrol. even though the prices have increased, demand is relatively stable.

oops, didn't realise you wanted an explanation for perfectly in/elasticity.

if a commodity's in/elasticity was perfect, a change in the independant variable would cause extreme results.

that is,

a change in price (perfectly inelastic demand) - no change in demand.
a change in price (perfectly elastic demand) - demand would disappear.

 

[drewgcn]

Aye, but isnt that "relatively elastic" and "relatively inelastic". Just came across this term "perfectly elastic/inelastic", and I don't see where it could apply.

 

[klaw]

They are theoretical... but some things come close, like a life-saving drug can almost be perfectly inelastic

 

[tempco]

Aye, but isnt that "relatively elastic" and "relatively inelastic". Just came across this term "perfectly elastic/inelastic", and I don't see where it could apply.

well, in reality, nothing is perfectly elastic/inelastic. however, some come close... petrol demand is very inelastic. as for something that is extremely elastic, i can't really think of a concise example right now.

 

[buffy19]

Perfectly inelastic - demand curve is vertical. A change in price does not effect the quantity demanded.

Perfectly inelastic - demand curve is horizontal. The output increases but only at a certain price level.

 

[underthebridge]

perfectly elastic is the second one

 

[buffy19]

Yep that's right. My bad!