Perfectly Elastic vs Perfectly Inelastic
Perfectly Elastic and Perfectly Inelastic are two Elasticity concepts in AP Economics that students often mix up. In short: perfectly elastic is perfectly elastic demand is when any change in price leads to an infinite change in quantity demanded. Meanwhile, perfectly inelastic is perfectly inelastic demand is when any change in price leads to no change in quantity demanded. Here is how they compare side by side.
Perfectly elastic demand is when any change in price leads to an infinite change in quantity demanded.
In perfectly elastic demand, consumers are infinitely sensitive to price changes. This means that even the slightest increase in price will cause the quantity demanded to drop to zero. Perfectly elastic demand is a theoretical concept that is not often observed in real markets.
Perfectly inelastic demand is when any change in price leads to no change in quantity demanded.
In perfectly inelastic demand, consumers are completely insensitive to price changes. This means that changes in price have no effect on the quantity demanded. Perfectly inelastic demand is a theoretical concept that is not often observed in real markets.
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