What is Degree of price elasticity of demand?explain it's type
Answers
Definition: The Elasticity of Demand measures the percentage change in quantity demanded for a percentage change in the price. ... Hence, the degree of responsiveness of a change in demand for a product due to the change in the income is known as income elasticity of demand.
Explanation:
The elasticity of demand refers to the responsiveness of the demand due to the change in the determinants of the demand. There are three types of elasticity of demand viz. price elasticity of demand, the income elasticity of demand and cross elasticity of demand.
In simple words, price elasticity of demand is the ratio of percentage change in quantity demanded to the percentage change in price. ... It is thus, rate at which the demand changes to the given change in prices. So, we can say that it is the rate or the degree of response in demand to the change in price.