Price Elasticity In Economics

Price elasticity is defined as the measure of change in the quantity demanded of a particular item or goods and the change of its price . Price elasticity of demanded (PED) is a term commonly used in economics in context to price sensitivity.
It is formulated as the ratio percentage change in quantity demanded to percentage change in price. For example if there is a small change in price and a large change in quantity demanded it is called elastic. Similarly if there is a large change in price and a small change in quantity demanded it is called inelastic.