Elasticity of Demand

Elasticity of Demand

What do you already know about the elasticity of demand?

Definition of Elasticity of Demand

Elasticity of demand measures how quantity demanded responds to a change in price.

Calculation of Elasticity of Demand

Elasticity is calculated by the formula (Q1 - Q2) / (Q1 + Q2) divided by (P1 - P2) / (P1 + P2).

Classification of Demand: Elastic, Inelastic, and Unitary

Elastic demand, inelastic demand, and unitary demand.

Factors Influencing Demand Elasticity: Availability of Substitutes

Availability of substitutes affecting demand elasticity.

Elasticity of Demand

Elastic Demand: A situation where the quantity demanded changes significantly as a result of price changes.

Elasticity of Demand

Inelastic Demand: A situation where the quantity demanded changes only slightly in response to price changes.

Elasticity of Demand

Unitary Demand: A situation where the quantity demanded changes at the same rate as the price.

Elasticity of Demand Formula

A mathematical expression that calculates the responsiveness of quantity demanded to price changes.

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