[This is part of the series: The Complete Guide To Economics 101.]
What is the price elasticity of demand?
The Price Elasticity Of Demand is the measure of how sensitive quantity demanded is to a change in price.
Price Elasticity Of Demand asks the question, for example:
If the price of a particular good or service increased by X%, what would be the impact on quantity demanded?
It is essentially a measure of how sensitive consumers are to changes in price.
(Price Elasticity Of Demand) = (% change in quantity demanded) / (% change in price)