Degrees of Price Elasticity
Chapter 4: Elasticity of Demand — From Perfectly Elastic to Perfectly Inelastic
The Five Degrees of Price Elasticity
Click each card to explore the schedule, graph, and real-world example for each degree.
Samosa Stall Connection:Imagine a samosa at ₹15 — if the price changes even slightly and nobody buys it (perfectly elastic, Eₔ = ∞), or if changing the price has zero effect on sales (perfectly inelastic, Eₔ = 0), both are imaginary extremes. Real samosas fall somewhere in between — if a ₹3 discount doubles sales, demand is highly elastic (Eₔ > 1). If the same discount only increases sales by a few, demand is less elastic (Eₔ < 1). The five degrees make this spectrum precise.
Quick Recap — Comparison Table
| Type | Value | Description | Rule |
|---|---|---|---|
| Perfectly Elastic | Eₔ = ∞ | Infinite demand at same price | Imaginary situation |
| Perfectly Inelastic | Eₔ = 0 | Same demand at all prices | Imaginary situation |
| Highly Elastic | Eₔ > 1 | % Δ in Demand > % Δ in Price | Flatter demand curve |
| Less Elastic | Eₔ < 1 | % Δ in Demand < % Δ in Price | Steeper demand curve |
| Unitary Elastic | Eₔ = 1 | % Δ in Demand = % Δ in Price | Rectangular hyperbola |
Slope vs Elasticity
Slope and Elasticity Are NOT the Same ThingIt is not possible to draw any inference about elasticity by merely looking at the slope of a curve.