The Demand for Demand this week

This week in class we learned about the elasticity of demand. It can be very challenging to understand and learn about if you cannot comprehend the basic principles of math. Elasticity of demand describes how responsive consumers are to price changes in the marketplace. There are two types of elasticity. There is elastic and inelastic. Elastic is a change in price with a relatively large change in quantity demanded, like TVs. Inelastic is a small change and a smaller quantity demanded, like Insulin. Sometimes even if the price is lower, the demand for it does not change. It is a relatively simple principle if you remember the names. Now here comes the hard part, MATH!!!! To calculate elasticity of demand, you will always work in percentages and use absolute value. If your result is greater than one, demand is elastic. If it is less than 1, it is inelastic. Pretty simple, right? Now the formula you use is the change in quantity over the change in price. By using this, you will be able to tell whether something changed over time due to price or not. It can be very helpful and is used to help businesses all over the world!!!