Relatively Inelastic Demand

Demand is said to relatively inelastic when a given change in price produces a less than proportionate change in quantity demanded. For example when a 50% fall in price of a good produces 10% rise in quantity demanded. The price elasticity of demand becomes less than 1. This is illustrated in the following diagram.

In Fig. 11, the demand curve is relatively steep. Here fall in price is P₁P₂ and rise in quantity demanded is Q₁Q₁<P₁P₂ price elasticity is less than one.