High School
SAT
ACT
University
MCAT
LSAT
DAT
Wize University Microeconomics Textbook > Elasticity

Perfectly Elastic and Inelastic

Different Elasticities Along the Demand Curve and Total RevenuePrevious Section
Income ElasticityNext Section
Popular Courses
Find My Course
0:00 / 0:00

Perfectly Elastic and Inelastic



Perfectly Inelastic

This means when price rises, quantity demanded does not change at all. The elasticity anywhere along this demand curve would be 0.

Example: Medicine a patient needs to live (insulin for a diabetic).

Wize Tip
Perfectly inelastic demand curve looks like the letter "I" for Inelastic!

Perfectly Elastic

This means when price rises, quantity demanded falls by an infinite amount. The elasticity anywhere along this demand curve would be negative infinity.

Example: Lettuce, wheat, gas at the gas station.
0:00 / 0:00

Example: Steep and Flat Demand Curves

The demand for a luxury good will be ___________ than the demand for a necessity good.

A) steeper
B) flatter
C) the same as
D) steeper or flatter

B. Remember a luxury good (like a nice watch) is more elastic which means a flatter demand curve. Necessity goods (like water) are more inelastic which means steeper.

Practice: Steep and Flat Demand Curves

Let's say Barbara and Betty have two different demand curves. One of them is steeper than the other. Which of the following could explain the difference in slopes?
Extra Practice
Let's say Barbara and Betty have two different demand curves. One of them is steeper than the other. Which of the following could explain the difference in slopes?
The demand for a good is perfectly inelastic.
Which is true? (More than one can be true)
When the demand curve is perfectly inelastic, an decrease in supply will lead to
When the supply curve is perfectly elastic, an increase in demand will lead to
Perfectly elastic demand is when quantity demanded does not respond to any price change, no matter how large the price change is.
The demand for a good is perfectly inelastic.
Practice: S&D/Equilibrium
The supply and demand curves for a good are shown below.
When the demand curve is perfectly inelastic, an increase in supply will lead to
When the supply curve is perfectly elastic, an increase in demand will lead to