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Elasticity of Demand:
Elasticity of Demand can be defined as proportionate change in demand of a commodity due to proportionate change in price of a commodity.

Kinds of Price Elasticity of Demand
1) Perfectly Elastic Demand:
When the demand for a product changes increases or decreases even when there is no change in price, it is known as perfectly elastic demand.

2) Perfectly Inelastic Demand:
When a change in price, howsoever large, causes no change in the quantity demand, it is known as perfectly inelastic demand. The shape of this demand curve is vertical parallel to Y-axis which indicates that there is no change in demand even though there is change in price.

3) Relatively Elastic Demand:
When the proportionate change in demand is more than the proportionate change in price, it is known as relatively elastic demand. Thus, for example. if the price of the product changes by 5 percent and demand changes by say 8 percent, it is a case of relatively elastic demand.

4) Relatively Inelastic Demand:
When the proportionate change in demand is less than the proportionate change in price, it is known as relatively inelastic demand. Thus, for example, if the price of the product changes by 5 % but demand changes say, only by 3 %, It is case of relatively inelastic demand.

5) Elasticity of Demand Equal to Unity : When the proportionate change in demand is equal to proportionate change in price, it is known as unitary elastic demand. Thus, for example, if a 5 percent change in price brings about a 5 percent change in demand, we shall say that the elasticity of demand is unity.

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