(i) Zero Condition of Demand Elasticity : A perfectly inelastic demand is the demand in which there is no effect on quantity demanded when the price changes. It is the condition where even significant changes in price leave the demand unaffected.
The diagram represents that the demand is perfectly inelastic. A curve DD is parallel to axis-OY. If price is Rs. 2, then demand is 4 units. When price increases to Rs. 4, the demand remains stable, i.e., Rs. 4 units. Therefore, no change occurs in demand, if the price increases. Elasticity of demand is equal to 0.
(ii) Infinite Condition of Demand Elasticity : A perfectly elastic demand refers to the condition when demand is infinite at the current price. It is the condition in which due to a little rise in price the quantity demanded of the commodity falls to zero. Given below diagram represents perfectly elastic demand curve.
A curve DD which is parallel to OX-axis is a perfectly elastic demand curve. It represents that when the price of commodity slightly rises from Rs. 4, the demand of the commodity will fall to 0. At the current price of Rs. 4, the consumer can buy 10 or 20 or 30 units or any quantity that he wants. In this situation, elasticity of demand is uncertain, means infinite or Ed = (∞).
