ECONOMICS (CBSE/UGC NET)

Detailed explanation-1: -The degree of sensitivity of consumers to a change in price is measured by the concept of price elasticity of demand. Price elasticity formula: Ed = percentage change in Qd / percentage change in Price.

Detailed explanation-2: -Price elasticity is the ratio between the percentage change in the quantity demanded (Qd) or supplied (Qs) and the corresponding percent change in price. The price elasticity of demand is the percentage change in the quantity demanded of a good or service divided by the percentage change in the price.

Detailed explanation-3: -With a downward-sloping demand curve, price and quantity demanded move in opposite directions, so the price elasticity of demand is always negative.

Detailed explanation-4: -Unitary elasticity means that a given percentage change in price leads to an equal percentage change in quantity demanded or supplied.