Final answer:
The own-price elasticity of demand indicates how the quantity demanded responds to price changes. Perfectly elastic demand has infinite elasticity at a given price, while perfectly inelastic demand has zero elasticity. The elasticity is greater than one for elastic demand, less than one for inelastic, and exactly one for unit-elastic demand.
Step-by-step explanation:
The own-price elasticity of demand can be different at various price points (P). When the price elasticity of demand is greater than one, demand is considered to be elastic, indicating high responsiveness to price changes. In contrast, if the price elasticity is less than one, demand is inelastic, showing low responsiveness to price changes. If the price elasticity is exactly one, demand is said to be unit-elastic, implying that the quantity demanded changes proportionally with price. In the case of perfectly elastic demand, the price elasticity is infinite, which means that consumers would buy any quantity at a given price but none if the price increases even slightly. For perfectly inelastic demand, the elasticity is zero; consumers will buy the same quantity regardless of price changes.