- Created by: Ezzb
- Created on: 24-06-21 10:30
Price Elasticity Of Demand
What is elasticity ?
- Elasticity measures the responsiveness of demand to a change in a relevant variable - such as price or income
Law of demand
= Price up - Demand goes down
= Price down - Demand goes up
Price elasticity looks beyond the law of demand to ask the more subtle question.
Price elasticity of demand
• Price elasticity of demand measures the extent to which the quantity of a product demanded is affected by a change in price
Price Elastic - % change in price results in a larger % change in demand
Product examples - Big Mac Meal / Transatlantic flights