Question

With the help of diagram, explain the following case of elasticity:

Relatively elastic demand curve.

Explain graphically the following:

Relatively Elastic Demand

Answer 1

Relatively elastic demand curve:

When a price change is small and change in quantity demanded is considerable, it is the situation of relatively elastic demand. The demand of luxuries, e.g., Jewellery is an example of highly elastic demand. Its demand has considerable extension or contraction with relatively minor price changes.