Examples include pizza, bread, books, and pencils. Similarly, perfectly elastic demand is an extreme example.

However, luxury goods, items that take a large share of individuals’ income, and goods with many substitutes

are likely to have highly elastic demand curves. Examples of such goods are Caribbean cruises and sports

vehicles.

FIGURE 5.4 Infinite Elasticity The horizontal lines show that an infinite quantity will be demanded or supplied at a

specific price. This illustrates the cases of a perfectly (or infinitely) elastic demand curve and supply curve. The

quantity supplied or demanded is extremely responsive to price changes, moving from zero for prices close to P to

infinite when prices reach P.

Zero elasticity or perfect inelasticity, as Figure 5.5 depicts, refers to the extreme case in which a percentage

change in price, no matter how large, results in zero change in quantity. While a perfectly inelastic supply is an
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