State the method of price elasticity of demand, Managerial Economics

Price elasticity of demand

The price elasticity of demand is defined as the degree of sensitiveness or responsiveness of demand for a commodity to the changes in its price. More precisely, elasticity of demand is the percentage change in the quantity demanded of a commodity as a result of a certain percentage change in its price. A formal definition of price elasticity of demand (e) is given below:

 

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