Chapter 6
Elasticity and its Implications
By Boundless
![Thumbnail](../../../../../figures.boundless-cdn.com/19978/square/elasticity-elastic.jpg)
The price elasticity of demand (PED) measures the change in demand for a good in response to a change in price.
![Thumbnail](../../../../../figures.boundless-cdn.com/20555/square/-of-demand-and-revenue.jpg.jpg)
The price elasticity of demand (PED) is calculated by dividing the percentage change in quantity demanded by the percentage change in price.
![Thumbnail](../../../../../figures.boundless-cdn.com/20086/square/icity-and-the-demand-curve.jpeg)
The price elasticity of demand (PED) explains how much changes in price affect changes in quantity demanded.
A good's price elasticity of demand is largely determined by the availability of substitute goods.
![Thumbnail](../../../../../figures.boundless-cdn.com/19957/raw/city-of-demand-complements.jpg)
The cross-price elasticity of demand measures the change in demand for one good in response to a change in price of another good.
![Thumbnail](../../../../../figures.boundless-cdn.com/19980/square/incomeelasticity.jpeg)
The income elasticity of demand measures the responsiveness of the demand for a good or service to a change in income.
![Thumbnail](../../../../../figures.boundless-cdn.com/20112/square/arc-elasticity.jpeg)
The basic elasticity formula has shortcomings which can be minimized by using the midpoint method or calculating the point elasticity.
![Thumbnail](../../../../../figures.boundless-cdn.com/19938/square/price-elasticity-over-time.jpg)
The price elasticity of supply is the measure of the responsiveness in quantity supplied to a change in price for a specific good.
![Thumbnail](../../../../../figures.boundless-cdn.com/19941/square/5-supply-and-demand-curves.jpeg)
The price elasticity of supply is the measure of the responsiveness of the quantity supplied of a particular good to a change in price.
![Thumbnail](../../../../../figures.boundless-cdn.com/19909/square/inelasticdmd.jpeg)
In economics, elasticity refers to how the supply and demand of a product changes in relation to a change in the price.