Calculating The Elasticity of Demand...

Price elasticity of demand:-

It is a measurement of change in quantity demand due to change in price of the commodity.It refers to the degree of responsiveness of quantity demand.Elasticity of demand measures the responsiveness of demand to change in price.

Elasticity is a measure of how much buyers and sellers respond to changes in market conditions.In other word Elasticity is a measure of the responsiveness of quantity demanded or quantity supplied to a change in one of its determinants.

Price in-elasticity of demand:-

In in-elasticity of demand the change in price doesn't effect on the demand of the commodity.If the price changes up to 25% but the demand changes is 2% to 3%.Then as compare to the price change the demand change is negligible.so it's in-elasticity of demand.

EXAMPLE-The price of SALT doesn't effect on market.Because people use salt in their day to day life,so the changes in price doesn't effect on the demand of people. 

                                                                                                                                    

                                                                

                                                   source:(www.economicsdiscussion.net)  

In the above diagram P1, P, P2 are the various price of a commodity.which is not effect on the demand of that commodity. SO ELASTICITY OF DEMAND (Ed=0)