Explain the different types (degrees) of price elasticity of demand.

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Price elasticity of demand ($E_p$) measures how strongly quantity demanded responds to an own-price change. Its five degrees are:

- **Perfectly inelastic ($E_p = 0$).** Quantity demanded does not change at all when price changes; the demand curve is a **vertical** line. Example: a life-saving medicine for a patient.
- **Relatively inelastic ($E_p < 1$).** Quantity changes **less** than proportionately to price; the curve is **steep**. Example: salt, everyday necessities.
- **Unitary elastic ($E_p = 1$).** Quantity changes **exactly** in proportion to price; total expenditure is unchanged; the curve is a **rectangular hyperbola**.
- **Relatively elastic ($E_p > 1$).** Quantity changes **more** than proportionately to price; the curve is **flat**. Example: luxuries and goods with close substitutes.
- **Perfectly elastic ($E_p = \infty$).** Buyers take any quantity at the ruling price but none at a higher price; the curve is **horizontal**. It is an ideal limiting case (a firm in perfect competition). …

Q.Explain the different types (degrees) of price elasticity of demand.

Concept understanding — Price Elasticity of Demand and Its Measurement

Q.Explain the different types (degrees) of price elasticity of demand.

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