Elasticity

Elasticity

Elasticity is the percentage change in a dependent variable resulting from a 1 percent change in an independent variable. It simply involves the percentage change in one variable associated with a given percentage change in another variable.

Wikipedia defines, elasticity is the measurement of how responsive an economic variable is to a change in another.For example: “If I lower the price of my product, the demand of the product will increase.

Investopedia defines, in economics, elasticity refers the degree to which individuals (consumers/producers) change their demand/amount supplied in response to price or income changes.

Elasticity is calculated as,

Elasticity calculation

Elasticity