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Question
How do we determine whether the demand for a particular commodity is elastic or inelastic?
Solution
The commodity is said to be perfectly elastic when:
Perfectly elastic: Demand is said to be completely elastic when a little change in price causes an indefinitely large change in the amount required of a good. A minor increase in the seller's price will reduce the demand for the commodity to zero, whereas a slight decrease in the price will result in such a large increase in demand for products that no single seller will be able to meet the demand at the decreased price. In such cases, the demand curve is a straight line parallel to the X-axis.
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