Elasticity of demand

Percentage change in demand / Percentage change in price

Change in quantity demanded / original quantity demanded x 100

Change in price / original price x 100

• Normal = negative
• Inferior = positive
• Elastic = result > 1 (responsive)
• Inelastic = result <1 (unresponsive)

Factors influencing

• Necessity (Luxury is more elastic)
• Habit (e.g. if they put phone charges up, you’re more likely to keep paying it- inelastic)
• Availabilty of substitutes (the easier it is to get an alternative- mass market- the more elastic it is)
• Brand loyalty (more likely to keep buying despite…