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

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demand curve will be parallel to the x axis when demand is perfectly elastic i.e without a change in price demand changes.

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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

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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

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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.

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.