Definition
- Elasticity
- Elasticity is an economics concept that measures the responsiveness of one variable to changes in another variable.
- Not to be confused with: Price elasticity of demand
- The price elasticity of demand is the percentage change in the quantity demanded of a good divided by the percentage change in its price.
Test yourself
What is the difference between elasticity and price elasticity of demand?
Elasticity is the general idea for any pair of variables; price elasticity of demand is the one that measures the response to the good's own price.