Price Elasticity of Demand

Price Elasticity of Demand

Introduction

Demand can be defined as the amount of product buyer wishes to purchase at a certain price. The relationship between price and demand is inverse an increase in price leads to a fall in quantity demanded for the good. Whereas supply is the number of units that producer is willing to supply to the market at certain price. There is a direct relationship between price and quantity supplied of good, an increase in prices will result in rise in quantity supplied for the good. The point at which both quantity demanded and supplied are equal ...