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  • Oh ya! then what is the graph for change in demand?
  • So when decrease in  demand falls it left from D to D2 while increase in demands it will shift to right from D to D1.
  • Price
  • D2
  • D
  • D1
  • Quantity
  • There's still anything else?
  • Of course, there's still a lot to catch up!So here it is. Price elasticity of  demand (Ed) is a measure of the responsive of quantity  demanded to change in price.
  • I remember this! so there are 3 degree of  responsiveness. 1)  Change in quantity demanded is larger than change in price (% Δ Q > % Δ P)Demand is elastic/ relatively elastic.2) Change in price is larger than change in quantity demanded(% Δ Q < % Δ P )Demand is inelastic/ relatively inelastic.3) Change in price is same as change in quantity demanded(% Δ Q = % Δ P )Demand is unitary elastic.
  • Yeap that right! 
  • but how we calculate it?
  • So we can calculate the degree of elasticity by elasticity coefficient. The formula is
  • Ed=
  • Ed= 
  • *PS negative sign (-)  in the answer is ignored
  • P2 - P1(P2 + P1) ÷ 2
  • Δ   QQ
  • Q2 - Q1(Q2 + Q1) ÷ 2
  • Or
  • ÷
  • Δ   PP
  • How we differentiate the price elasticities with diagram?
  • OK. so if,- elasticity = 0 (perfect inelastic I vertical)-elasticity < 1(relatively inelastic I steep)-elasticity = 1 (unitary elastic I hyperbola)-elasticity > 1 (relatively elastic I flat)-elasticity = ∞  (perfect elastic I horizontal)
  • What is the factors that influence of Price Elasticity of Demand (Ed)?
  • The factors of Price Elasticity of Demand (Ed) are, -Availability of substitutes-Extent of necessity-Relative cost-Durability-Addiction-Time period
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