Elasticity Of Demand And Supply

1601 Words Apr 12th, 2016 7 Pages
Introduction 2
Elasticity: - 2
Elasticity of Demand 2
Elasticity of Supply 4
Elastic and Inelastic Supply: 5
Conclusion: 6
References: 6

Elasticity of Demand and Supply
Elasticity: - In Economics, how responsive an economic variable is to a change in another is the measurement of elasticity. It is a unit free measure. By using Elasticities, we can measure the two markets of price and quantity. The difference among markets can be quantified by the economist using elasticities without the measurement of the units. It is the responsiveness of demand or supply to a change in another (e.g. cost). This idea is basic to appreciating how advertises function. The most widely recognized versatilities utilized incorporate value flexibility of interest, value flexibility of supply, cross-value flexibility of interest and pay flexibility of interest. One of the important notion in economics is Elasticity. It is useful in understanding the concepts of consumer choice, Taxation and producer surplus.
The Equation of Elasticity is = % of change in quantity / % of change in price.

Elasticity of Demand
According to the article in Harvard Business Review on Elasticity of Demand is also referred to as Price Elasticity of Demand in Economic measures is based on the effect of how the quantity demanded is changed when there is…
Open Document