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Elasticity of Demand |
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Description of Elasticity of Demand. Explanation. |
Definition Elasticity of Demand. Description.
Elasticity of Demand indicates the responsiveness of demand to a change in a determinate, for instance, price, price of other goods and income. It measures the responsiveness of the quantity demanded of a good to its price.
You can calculate the (price) elasticity of demand by the percentage change in quantity demanded that occurs in response to a percentage change in price. For example, if, in response to a 15% fall in the price of a good, the quantity demanded increases by 30%, the price elasticity of demand would be 30%/(− 15%) = −2. |
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End of description Elasticity of Demand. An explanation. |
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