Elasticity Of Demand :-

Elasticity of demand can be defined as the percentage change in demand which

would in percentage change in price and other factors.

Or,
Elasticity of demand can be defined as the percentage in demand of the
commodity due to percentage change in price and other factors like:- income,
trends

Types Of Elasticity of Demand:-

1.Price elasticity of demand:-

Price elasticity of demand can be say's that percentage change in demand of

commodity due to percentage change in price.

Price elasticity of demand= ℅ change in quantity demanded / ℅ change in price

2.Degree elasticity of demand:-

(a). Perfectly elastic of demand(ep=a) :-

In it minor change in price of commodity but doesn't effect on demand, demand

of commodity continuously change without any change of price.

(b). Highly elastic of demand(e>1) :-

In this elasticity of demand more percentage change in demand of the commodity

in comparison to price.

(c.) Unitary elastic demand(e=1) :-

In this elasticity of demand there is equal percentage change in demand of

commodity and price.

(d). Highly inelastic demand(e<1) :-

In it percentage change in demand of commodity is less than percentage change

in demand in price.
(e). Perfectly inelastic demand:-

When there is extreme percentage change in price of the commodity and if

minor, as like nothing percentage change in demand is known as perfectly
inelastic demand.

3. Income elasticity of demand:-

According to this elasticity of demand due to certain percentage change in

consumer income there is certain percentage change in demand which is known
as income elasticity of demand. Ex- if Someone income is more than 1 lakhs then
he always prefer things as per there income and status.

4. Cross elasticity of demand:-

In this elasticity of demand due to certain percentage change in price of one

commodity, certain percentage change in demand of another commodity. For
example of toothbrush and Colgate if the Colgate price will be high then
toothbrush price automatically become low.