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Economics 12 Notes for Economics Notes

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Price elasticity of demand

Price elasticity of demand (ep)

It refers the percentage change in quality demand due to the certain percentage change in price when other things remaining the same. Mathematically it is explained as:

demand formula

Where,
ed = elasticity of demand
∆Q = change in quantity demand
∆P = change in price commodity
P = initial price
Q = initial quantity demand

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