Two extreme cases

Two extreme cases - as a horizontal demand curve (ii)...

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Two extreme cases: Two more extreme values of price elasticity of demand can be included in the analysis. These are: (i) Perfectly Price Elastic: At this extreme, for any small decrease in price, the increase in the quantity demanded is infinitely large. In such a case, demanders demand the entire can. Here the demand is said to be perfectly price elastic (e = that is infinity ). This is represented graphically
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Unformatted text preview: as a horizontal demand curve (ii) Perfectly Price Inelastic: At this extreme, for any change in price there is no change in the quantity demanded. Therefore the demand is completely unresponsive to any change in price. In this case the demand is said to be perfectly price inelastic (e = 0). This is represented graphically by a vertical demand curve...
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This note was uploaded on 11/17/2011 for the course EC ec 201 taught by Professor - during the Fall '10 term at Montgomery.

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