PRICE ELASTICITY OF DEMAND

Price Elasticity of Demand

Price Elasticity of Demand

Introduction

The change in the demand under the influence of price dynamics has another striking feature, dubbed the "price elasticity of demand." It is a measure of response of quantity demanded to changes in price. If a small change in price causes a significant change in demand, such demand is known as "elastic demand", even if a very large change in price is only slightly changes the magnitude of demand, such demand is called "inelastic." (Gillespie 2007)

Discussion

In this issue we need to understand the nature of the market and how under the influence ...