The price elasticity of demand is the response of the quantity demanded to change in the price of a commodity. Displaystyletext Price Elasticity of Demandfrac text percent change in quantity text percent change in price Price Elasticity of Demand percent change in price percent change in quantity. The formula for elasticity of demand involves a derivative which is why were discussing it here.
So over here the absolute value of our price elasticity of demand is equal to nine and then over here the absolute value of our price elasticity of demand is equal to 025.
The formula for the demand elasticity is. The price elasticity of demand which is often shortened to demand elasticity is de ned to be the percentage change in quantity demanded q divided by the percentage change in price p. Elasticity of demand is a measure of how demand reacts to price changes. In other words quantity changes faster than price.