Question

Distinguish between:

Unitary elastic demand and Relatively elastic demand

Answer 1

Unitary elastic demand	Relatively elastic demand
When a percentage change in price leads to a proportionate change in quantity demanded then demand is said to be unitary elastic.	In this case, the change in price leads to a proportionately large change in the quantity demanded.
It represents a 'rectangular hyperbola' demand curve.	It represents a flatter demand curve.
Symbolically it is represented as Ed = 1	Symbolically it is represented as  Ed > 1.
For example, 50% fall in price of a commodity leads to 50% rise in quantity demanded.	For example - a 50% fall in price leads to a 100% rise in quantity demanded.