The Elasticity of Demand meaning
The elasticity of demand refers to how sensitive the demand for a good is to differences in other economic variables, such as cost prices and customer benefits. Higher demand elasticity for an economic variable indicates that 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 (3) methods of measuring price elasticity of demand:
- Proportionate/Percentage Method
- Total Expenditure or Total Outlay Method
- Geometric Method
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