Elasticity of Demand

Presented by : Bakkaprabhu Uppar

Managerial Economics
GFGC Bidar
 What is Elasticity of Demand

• An Elastic Demand is one in which the change in quantity demand due to a

change in price is large
 Types of Elasticity of Demand

 1. Price Elasticity of Demand : Measures the changes in demand of

a commodity due to change in its own price.

PeD   =   Percentage change in quantity demands of commodity /                             

                                            percentage change in its own price
2. Income elasticity of demand : Income Elasticity of
Demand (is the responsiveness of demand to the change in income.

Cy = % change in quantity demanded / % change in income          

3. Cross Elasticity of Demand :

Cy = % change in quantity demanded of commodity / % change in the price 

                                                                                                                        of commodity          
4. Advertising Elasticity of Demand :
                                    Measure of an advertising campaigns effectiveness in
generating new sales. 

Cy = % change in quantity demanded of commodity / % change in the price 

                                                                                                                        of commodity          
End of Seminar