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Essay text:
It is measured as elasticity, that is it measures the relationship as the ratio of percentage changes between quantity demanded of a good and changes in its price
Interpretation of elasticity
Value Meaning
n = 0 Perfectly inelastic.
0 > n > -1 Relatively inelastic.
n = -1 Unit (or unitary) elastic.
-1 > n > -? Relatively elastic.
n = -? Perfectly elastic.
A price drop usually results in an increase in the quantity demanded by consumers
The demand for a good is relatively inelastic when the change in quantity demanded is less than change in price. Goods and services for which no substitutes exist are generally inelastic...
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