What are various models for calculation and
evaluation of price elasticity?
Price elasticity (E) measures the
proportional change in quantity with respect to a proportional change in price. E=
(percentage change in quantity) / (percentage change in price).
There are two types of price
elasticity:
Price elasticity of demand (Ed) measures the change
in quantity demanded (Qd) with respect to the change in price (P).
Ed =
percent change in Qd / percent change in P
Where Quantity demanded (Qd) is a specific amount
that will be demanded per unit of time at a specific price.
Price elasticity of supply (ES) measures the change
in quantity supplied (QS) with respect to the change in price.
ES =
percent change in Qs / percent change in P
Where Quantity supplied (QS) is a specific
amount that will be supplied per unit of time at a specific price.
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