Concept of Price Elasticity of Demand


  • Elasticity means expansion and contraction.
  • Elasticity of Demand means expansion and contraction of demand
  • Price Elasticity of Demand means expansion and contraction of demand due to change in price.

We know: demand expands (or extends) when price falls, and demand contracts when price rises.

Price elasticity of demand measures the extent to which demand extends when price falls, and the extent to which demand contracts when price rises.

Price elasticity of demand measures the extent to which demand extends when price falls, and the extent to which demand contracts when price rises.