The percentage change in the quantity of one product demanded compared with the percentage change in price in another product is called price elasticity of demand. The quantity demanded of a good or service divided by the percentage change in price is the price elasticity of demand.
The percentage change in quantity supplied divided by the percentage change in price represents the price elasticity of supply. Perfectly inelastic, inelastic, perfectly elastic, elastic, and unitary are the five different types of price elasticity of demand. By dividing the percentage change in quantity required by the percentage change in price, one can determine the price elasticity of demand.
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