It’s possible to determine price elasticity in diagrams as well. Figure 4-2 illustrates the three cases of elasticities. In each case, price is cut in half and consumers change their quantity demanded from A to B.

In Figure 4-2(a), a having of price. has tripled quantity demanded. Like the example in Figure 4-1,this case shows price-elastic demand. In Figure 4-2(c), cutting price in half-led to only a 50 percent increase in quantity demanded, so this is the case of price-inelastic demand. The borderline case of unit-elastic demand is shown in Figure 4-2(6); in this example,the doubling of quantity demanded exactly matches the halving of price.

Figure 4-3 displays the important polar extremes where the price elasticity are infinite and zero, or completely elastic and completely inelastic. Completely inelastic demands, or ones’ with zero elasticity, are ones where the quantity demanded responds not at all to price changes; such demand is seen to be a vertical demand curve. By contrast, when demand is .infinitely elastic, a tiny change in price will lead to an indefinitely large change in quantity demanded, as in the’ horizontal demand curve in Figure 4-3.

Polar extremes of demand are vertical demand curves,which represent perfectly inelastic demand (ED = 0) and horizontal demand curves, which show perfectly elastic demand (ED = X).

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