Types of P.E.D

• Perfectly ineslastic demand

  • This occurs when a change in price of a commodity does not lead to a change in the qty dd of that good.
  • This type of P.E.D applies to neccesities/needs.
  • The demand curve is vertical.
  • The value of P.E.D is 0.

  
• Inelastic demand

  • This occurs when a greater change in price of a good leads to a smaller change in qty dd of that good.
  • This type of P.E.D applies to habitual/addictve goods such as alcohol and cigarettes.
  • P.E.D will equal to 0>P.E.D<1 (greater than 0 but less than 1)

  
• Unitary demand

  • This occurs when a change is price leads to an equal change in qty dd of a good.
  • Change in price is equal to qty dd.
  • This type of P.E.D applies to comfort goods such as netflix supbscriptions or gym memberships.
  • P.E.D is equal to 1.

  
• Elastic demand

  • This occurs when a smaller change in price leads to a greater change in qty dd.
  • P.E.D is greater than 1 (>1)

  
• Perfectly elastic demand

  • This is when a slight change in price leads to an endless(infinite) change in qty dd of that good.
  • The demand curve is horizontal.
  • This means that buyers purchase as much as they possibly can>
  • P.E.D = Infinite