Concept of Elasticity of Demand

Elasticity of Demand

The elasticity of demand refers to the sensitivity of the demand for a good to the differences in other economic variables such as prices and customer benefits. Higher demand elasticity for an economic variable indicates that the customers are more conscious of changes in this variable.

Types of Elasticity of Demand

•     Price elasticity of demand
•     Cross elasticity of demand
•     Income elasticity of demand
•     Advertisement elasticity of demand

Measurement of Price Elasticity of Demand

Primarily, there are three methods of measuring the price elasticity of demand.

•     Proportionate/Percentage method
•     Total expenditure or Total outlay method
•     Geometric method

This article was about the elasticity of demand, which is an important concept for the students of commerce. For more data on economics syllabus, commerce notifications, and sample papers, stay tuned to BYJU’S.