Elasticity of Demand

Price Elasticity of demand measures the responsiveness of demand to a change in price. 

Formula: 

% change in quantity demanded divided by the % change in price

How to work out the % change in price or demand?

Find the change in demand and then divide it by the original price/quantity. Then you have the percentage change. Work out both. 

Then put them into the formula. 

Price elastic= More than 1- Change in demand is more than the change in price. 

Price inelastic= Less than 1- Change in price is less than the change in price 

Elastic products examples= Chocolate bars, bread and newspapers. 

Price inelastic examples= Tobacco, Sports subscription, train tickets often unique products with high brand loyalty.