What Is the Price Elasticity of Demand of a Gubmnt Provided Good?

Brian Ferguson and I recently had a fun, silly e-mail exchange about this question.

The equation for price elasticity of demand is E = (dq/dp)(P/Q)

So if the price is zero, then the elasticity of demand must be zero, too, right? No wonder so many politicians seem to think demand curves are vertical! 8-)

note to students: an infinitesimal rise in price would, however, change matters. As Brian says, it might be good to use "arc elasticity" measures instead of "point elasticity" in cases like this.