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Question
Distinguish between Relatively elastic demand and relatively inelastic demand.
Solution
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Relatively elastic demand
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Relatively inelastic demand
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In this case, the change in price leads to a proportionately large change in the quantity demanded.
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In this case, the change in price leads to a proportionately less change in the quantity demanded.
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It represents a flatter demand curve.
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It represents a steeper demand curve.
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Symbolically, it is represented as Ed > 1.
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Symbolically, it is represented as Ed < 1.
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For example - a 50% fall in price leads to a 100% rise in quantity demanded.
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For example - a 50% fall in price leads to a 25% rise in quantity demanded.
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