Skip to main content
Chemistry LibreTexts

6.21: Reading- Three Categories of Elasticity

  1. Last updated
  2. Save as PDF
  • Page ID
    248962

    • \( \newcommand{\vecs}[1]{\overset { \scriptstyle \rightharpoonup} {\mathbf{#1}} } \) \( \newcommand{\vecd}[1]{\overset{-\!-\!\rightharpoonup}{\vphantom{a}\smash {#1}}} \)\(\newcommand{\id}{\mathrm{id}}\) \( \newcommand{\Span}{\mathrm{span}}\) \( \newcommand{\kernel}{\mathrm{null}\,}\) \( \newcommand{\range}{\mathrm{range}\,}\) \( \newcommand{\RealPart}{\mathrm{Re}}\) \( \newcommand{\ImaginaryPart}{\mathrm{Im}}\) \( \newcommand{\Argument}{\mathrm{Arg}}\) \( \newcommand{\norm}[1]{\| #1 \|}\) \( \newcommand{\inner}[2]{\langle #1, #2 \rangle}\) \( \newcommand{\Span}{\mathrm{span}}\) \(\newcommand{\id}{\mathrm{id}}\) \( \newcommand{\Span}{\mathrm{span}}\) \( \newcommand{\kernel}{\mathrm{null}\,}\) \( \newcommand{\range}{\mathrm{range}\,}\) \( \newcommand{\RealPart}{\mathrm{Re}}\) \( \newcommand{\ImaginaryPart}{\mathrm{Im}}\) \( \newcommand{\Argument}{\mathrm{Arg}}\) \( \newcommand{\norm}[1]{\| #1 \|}\) \( \newcommand{\inner}[2]{\langle #1, #2 \rangle}\) \( \newcommand{\Span}{\mathrm{span}}\)\(\newcommand{\AA}{\unicode[.8,0]{x212B}}\)

    Photo of three meerkats at a zoo.

    It’s helpful to divide elasticities into three categories: elastic, inelastic, and unitary. An elastic demand or elastic supply is one in which the elasticity is greater than 1, indicating a high responsiveness to changes in price. Elasticities that are less than 1 indicate low responsiveness to price changes and correspond to inelastic demand or inelastic supply. Unitary elasticities indicate proportional responsiveness of either demand or supply. In other words, the change in demand or supply is equal to the change in price, and the elasticities equal 1. These ranges are summarized in Table 1, below.

    Table 1.Three Categories of Elasticity: Elastic, Inelastic, and Unitary
    If . . . Then . . . And It’s Called . . .
    % change in quantity > % change in price % change in quantity % change in price > 1 Elastic
    % change in quantity = % change in price % change in quantity % change in price = 1 Unitary
    % change in quantity < % change in price % change in quantity % change in price < 1 Inelastic

     

    CC licensed content, Original
    CC licensed content, Shared previously

    6.21: Reading- Three Categories of Elasticity is shared under a not declared license and was authored, remixed, and/or curated by LibreTexts.

    1. Back to top
    • Was this article helpful?

    Recommended articles

    1. Article type
      Section or Page
      OER program or Publisher
      Lumen
    2. Tags
      This page has no tags.