Authors libby rittenberg 247

demand in this case is therefore zero, and the demand curve is said to
be perfectly inelastic. This is a theoretically extreme case, and no good that
has been studied empirically exactly fits it. A good that comes close, at least
over a specific price range, is insulin. A diabetic will not consume more
insulin as its price falls but, over some price range, will consume the
amount needed to control the disease.
Figure 5.5 Demand Curves with Constant Price Elasticities

The demand curve in Panel (a) is perfectly inelastic. The demand curve
in Panel (b) is perfectly elastic. Price elasticity of demand is −1.00 all
along the demand curve in Panel (c), whereas it is −0.50 all along the
demand curve in Panel (d).
As illustrated in Figure 5.5 "Demand Curves with Constant Price
Elasticities", several other types of demand curves have the same elasticity
at every point on them. The demand curve in Panel (b) is horizontal. This
Attributed to Libby Rittenberg and Timothy Tregarthen
Saylor URL: />
Saylor.org

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