“The elasticity (or responsiveness) of demand in a market is great or small according as the amount demanded increases much or little for a given fall in price, and diminishes much or little for a given rise in price”. We will read about these in detail, later in the blog.
The demand for a commodity is affected by different economic variables:
In other words, the elasticity of demand is the percentage change in quantity demanded divided by the percentage change in another economic variable. It measures the shift in demand when other economic factors change. Let’s begin our blog with a definition of Elasticity of Demand and then we will explore the different types of Elasticity of Demand.Īlso, read our blog on 4 types of Elasticity in economicsĮlasticity of Demand, or Demand Elasticity, is the measure of change in quantity demanded of a product in response to a change in any of the market variables, like price, income etc. There are several factors that affect the quantity demanded for a product such as the income levels of people, price of the product, price of other products in the segment, and various others. Elasticity is a concept in economics that talks about the effect of change in one economic variable on the other.Įlasticity of Demand, on the other hand, specifically measures the effect of change in an economic variable on the quantity demanded of a product.
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