MEANING AND DEFINITIONOFELASTICITY OF DEMAND
The term elasticity was developed by Alfred Marshall, and isused to measure the relationship between price and quantitydemanded. The law states that the price of a commodity falls, thequantity demanded of that commodity will increase, i.e. it explainsonly the direction of change in demand and not the extent of change.This deficiency is removed by the concept of elasticity of demand.Elasticity means responsiveness. Elasticity of demand refersto the responsiveness of quantity demanded of a commodity tochange in its price.According to E.K. Estham, “elasticity of demand is a measure of theresponsiveness of quantity demanded to a change in price”.