By the end of this section, you will be able to:

• Differentiate between infinite and zero elasticity

• Analyze graphs in order to classify elasticity as constant unitary, infinite, or zero

There are two extreme cases of elasticity: when elasticity equals zero and when it is infinite. A third case of

interest is that of constant unitary elasticity. We will describe each case. Infinite elasticity or perfect elasticity

refers to the extreme case where either the quantity demanded (Qd) or supplied (Qs) changes by an infinite

amount in response to any change in price at all. In both cases, the supply and the demand curve are

horizontal as Figure 5.4 shows. While perfectly elastic supply curves are for the most part unrealistic, goods

with readily available inputs and whose production can easily expand will feature highly elastic supply curves.

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