Elasticity of demand is a major of how changing quantity demand due to change in its price. That is,
Percentage change in quantity demand
Ed =
Percentage change in price
According to Prof. A. Marshall-
“The degree
of rapidity or slowness with which demand changes with every change in price is
known as elasticity of demand."
In the words of Lipsey-
"Elasticity
of demand is the measure of the responsiveness of the quantity demanded to
change in price."
In
mathematical terms, elasticity of demand is-
% Δ Qd Δ Qd ÷ Qd X 100 Δ Qd ÷ Qd
Ed =
= = = Δ Qd /Qd X P /Δ P
% Δ P Δ P ÷ P X 100 Δ P ÷ P
= Δ Qd /Δ
P X P / Qd
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