Because whatever, it doesn't matter how much you price, whatever the price is,
whatever the change in price, you still consume the same.
Right? So there's no change in quantity.
Now, you can have another situation in which you change your price by a little
bit and then you lose all your demand. Right?
So when you change a P1, you're consumption of Q1.
But then you change to P2, and your consumption is 0.
You consume nothing, alright? So how would that demand for that good
will look like, well that would be kind of a straight line like this.
That will be the manual would look like that.
And that's a perfectly elastic. Kind of looks like an E, right?
And you put another thing here. So these are the two extremes.
And in between, you can have what, where most goods are, are in between.
There's no perfectly elastic good, right? There's no, probably no perfectly elastic
good but what we have is, is kind of like in between so you have.
A demand which are like this, in between. And the closer it is to the eye, the more
inelastic the good is. And the flatter it is, the more elastic
the good is. So that's the best way you can remember
how the, the inclination of the curve relates to the elasticity.
The more it looks like a vertical line, the more inelastic that good is.
The more it looks like a, a flat line, the more elastic that good is.
Now how about the position on the curve. Well that's actually easier, because it
has to do just with the price. So, what we said, again we have a
quantity amounted here and the price of the good here and the demand curve is
downward sloping like this. And what we said is that at, at, when the
good is more expensive, it tends to be more elastic and when the good is
cheaper, it tends to be more inelastic. Right?
So what we're saying is that if you move higher in this curve you're going to
become the, the elasticity is going to become more and more elastic.
And you're going to be down in this curve when the prices is really, really low
it's going to be inelastic. So you can have two different
elasticitys, your good could be elastic or inelastic depending on how much the
price is. So if that's going to be the case, then
the only conclusion you can have is that the price of your good is going to move
from, depending how you look at it, right?
If you're talking about, that's going to p two.
If you're talking about P2, a low price is going to be more elastic.
I'm sorry, more inelastic. [SOUND].
Then as you increase the price of the good.
Then it becomes more and more, your budget.
Then the good becomes, more elastic on a high price.
Your good is going to, is going to tend to be more elastic.
And that at some point from moving from inelastic to elastic has to pass through
one. Right?
So at some point it's going to have an elasticity of unitary.