Relatively elastic demand Content
Relatively elastic demand
If the percentage change in quantity demand is greater than the percentage change in price is known as relatively elastic demand. For example 10% change in demand due to 5% change in demand; we can explain it by following figure
On the above figure, when price is OP then quantity demand for that commodity is OQ. When prices become P1 by increasing by 5% then quantity demand decreases from Q to Q1 by 10% and when price decreases by 5% to Po then quantity demand increases from Q to Qo by 10%.