Price Elasticity of Demand
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unitary
1 - QD changes exactly same % as price
elastic
greater than 1 (>1) - demand is relatively sensitive to price change; QD changes is larger % than price
Inelastic
less than 1 (<1) - demand is relatively insensitive to price changes; QD is smaller % than price
computation/formula
new-old
perfectly inelastic
zero (0) - QD doesn't change as price changes
what do you do if there's a negative?
disregard
perfectly elastic
infinity - purchasers will buy all they can at the same price and none at all at an even slightly higher price (hypothetical)
what does it measure?
the degree of responsiveness of quantity demanded of the buyer's change; how stretchable
