# What is meant by Price Elasticity of Demand? When will the Demand Curve be parallel to X-axis?

2
by inderGupta690

2014-08-02T10:03:47+05:30
Price elasticity of demand is the degree of responsiveness of demand with a 1% change in price
demand curve will be parallel to the x axis when demand is perfectly elastic i.e without a change in price demand changes.
2014-08-02T10:27:50+05:30

### This Is a Certified Answer

Certified answers contain reliable, trustworthy information vouched for by a hand-picked team of experts. Brainly has millions of high quality answers, all of them carefully moderated by our most trusted community members, but certified answers are the finest of the finest.
It is the % change in quantity demanded in respsonse to 1% change in Price.
Price elasticity is usually negative.
If price elasticity of demand  (PED) is more than 1, then the price has a large effect on the quanity demanded.

It can be also written as  PED =  change in quantity / original quantity
---------------------------------------------------
change in price / original price
So x axis here is Quantity axis.
If the curve is parallel to x axis, it means The % change in price is always same what ever the quantity demanded is. This is perfectly elastic situation.

Suppose we are buying vegetables at Rs 10 a kg.  If we buy 2 kg its R20. if we buy 1/2 kg then Rs5.  If we buy 3 kg it costs Rs30. After buying 3 kg, if we buy 1 kg more it costs Rs10 more.  After buying 8 kg , if we buy 1 kg again, then it costsRs10 more .
SO you see, at any quanitity Q we have already purchased,  we want to buy 1kg more then it costs Rs10.  change in cost is Rs10 and
At any value of Q,  PED  =  change in quantity / original quantity = 1 / Q
---------------------------------------------------      --------
change in price / price                          10 / P

But P = Rs 10 * Q    as P is the price of Q quantity of the vegetables.

So  PED  =  P/ 10 Q  = 10 Q/10 Q  = 1

PED is always same whatever the quantity already purchased.  So the curve is parallel to x axis and that is Q axis.