Price Elasticity of Demand

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