Economics 12 Notes for Economics Notes

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Perfectly elastic demand

Due to slight fall or rise in the price of commodity, if quality demand increases or decreases infinitely then it is known as perfectly elastic demand. We can explain it on the following figure:


On the above figure, in initial stage price in OP then quantity is Q. When price slightly increases then demand decreases from Q to Qo. When price decreases then demand increases rapidly from Q to Q1. This shows infinity change.

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