can you give me note on Elasticity of demand and supply?
March1
5 Apr, 2026
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Elasticity of Demand & Supply:
Elasticity of Demand:
- Measures responsiveness of quantity demanded to price changes
- Ed = %ΔQd / %ΔP
- Types:
- Elastic (Ed > 1)
- Inelastic (Ed < 1)
- Unit elastic (Ed = 1)
Elasticity of Supply:
- Measures responsiveness of quantity supplied to price changes
- Es = %ΔQs / %ΔP
- Types:
- Elastic (Es > 1)
- Inelastic (Es < 1)
- Unit elastic (Es = 1)
Factors affecting elasticity:
- Demand: substitutes, necessity, income share
- Supply: production flexibility, time
demand may be define as the quantity of goods and services
that consumer are willing and able to buy alternative price over
a given period of time