| Price
Elasticity of Demand |
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Price
Elasticity =
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%
Change in Quantity Demanded
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%
Change in Price
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Price
Elasticity measures the responsiveness of the quantity demanded of
a good to a change in its price.
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If
a small change in price is accompanied by a large change in quantity
demanded, the product is said to be elastic (or responsive to price
changes). The opposite also applies, a product is inelastic if a large
change in price is accompanied by a small amount of change in demand. |
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Dictionary
