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Price Elasticity of Demand on a Graph definitions

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  • Perfectly Elastic Demand
    A horizontal line on a graph, indicating infinite responsiveness; quantity demanded changes instantly with any price change.
  • Perfectly Inelastic Demand
    A vertical line on a graph, showing zero responsiveness; quantity demanded remains constant regardless of price.
  • Elastic Demand
    A shallow curve where small price changes cause large shifts in quantity demanded, typical for goods with close substitutes.
  • Inelastic Demand
    A steep curve where quantity demanded changes minimally despite significant price shifts, common for necessities.
  • Unit Elastic Demand
    A curve where percentage changes in price and quantity demanded are equal, often seen in products like clothing.
  • Demand Curve
    A graphical representation showing the relationship between price and quantity demanded, shaped by elasticity.
  • Price Elasticity
    A measure of how much quantity demanded responds to price changes, ranging from zero to infinity.
  • Necessity
    A product for which demand remains stable even with price increases, such as gasoline or life-saving drugs.
  • Substitute
    An alternative product that consumers switch to when the price of another good rises, like chicken for beef.
  • Percentage Change
    A proportional shift in price or quantity, used to compare responsiveness in elasticity calculations.
  • Competitive Market
    A market where many sellers offer identical products, leading to perfectly elastic demand for individual suppliers.
  • Quantity Demanded
    The amount of a product consumers are willing to purchase at a specific price, influenced by elasticity.
  • Horizontal Line
    A graphical feature representing infinite elasticity, where price remains constant and quantity varies.
  • Vertical Line
    A graphical feature representing zero elasticity, where quantity remains constant and price varies.
  • Steep Curve
    A graph shape indicating low responsiveness; large price changes result in small quantity changes.