When an economy grows, firms would prefer to be making inferior goods rather than making normal goods

If a firm notices that the price of a substitute for its product has fallen, it would prefer the CED between the products to be far from zero rather than close to zero

If a firm notices that the price of a complement for its product has risen, it would prefer the CED between the products to be far from zero rather than close to zero

If a firm’s costs increase and it has to increase the price of its output, it would prefer demand to be price inelastic rather than price elastic

Those with a PES close to 0.0 and an IED well above 0.0

Those with a PES close to 0.0 and an IED well below 0.0

Those with a PES well above 1.0 and an IED well above 0.0

Those with a PES well above 1.0 and an IED well below 0.0

0.5

-0.5

2

-2

PES is infinity all along any horizontal supply curve

PES is 1.0 all along any supply curve which passes through the origin

PED is zero all along any vertical demand curve

PED is -1.0 along any demand curve where spending would be the same at each price

The producers are close to full capacity

One or more of the key intermediate products needed to make the product are themselves items with an inelastic supply

Consumers need very little time to respond fully to price changes

One type of labour used by the producers may be in inelastic supply