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प्रश्न
Explain price elasticity of demand.
उत्तर
Price elasticity of demand is the measure of the degree of responsiveness of the demand for a good to the changes in its price. It is defined as the percentage change in the demand for a good divided by the percentage change in its price.
`e_d = ("Precentage change in the demand for a good ")/("Precentage change in the price of the good ")`
`e_d = (Delta Q)/(Delta P ) xx P/Q`
Where,
ΔQ = Q2 − Q1, change in demand
ΔP = P2 − P1, change in demand
P = Initial price
Q = Initial quantity
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