What is Elasticity demand? Types, definitions and Processes.

What is Elasticity- If the quantity demanded of a product changes greatly in response to changes in its price, it is termed "elastic." That is, the demand point for the product is stretched far from its prior point. If the quantity purchased shows a small change after a change in its price, it is termed "inelastic." The quantity didn't stretch much from its prior point.

Elasticity demand- Price elasticity of demand is a measurement of the change in consumption of a product about a change in its price.

Types of Elasticity Demand-

Price Elasticity of Demand (PED)
Income Elasticity of Demand (YED)
Cross Elasticity of Demand (XED)

To calculate the elasticity of demand, consider this example: Suppose that the price of apples falls by 6% from $1.99 a bushel to $1.87 a bushel. In response, grocery shoppers increase their apple purchases by 20%. The elasticity of apples therefore is: 0.20/0.06 = 3.33, The demand for apples is quite elastic.