Elasticity

Elasticity:
-it is a numerical estimate
-it measures the response to a change in price or to a change in any others factors that determine the demand or supply of a product

Elasticity is the extent to which buyers and sellers respond to a change in market conditions.

PED.
Price Elasticity of Demand is the responsiveness of quantity demanded to a change in the price of the product. 

PED = (% change in quantity demanded / % change in price)

Price Elastic: where the % change in the quantity demanded is sensitive to a change in price.
Price Inelastic: where the % change in the quantity demanded is insensitive to a change in price.

PED > 1 elastic
PED < 1 inelastic
PED = 1perfectly elastic

PES.
Price Elasticity of Supply is the responsiveness of quantity supplied to a change in the price of the product.
PES = (% change in quantity supplied / % change in price)

PES > 1 elastic
PES < 1 inelastic
PES = 0 perfectly inelastic

YED.
Income Elasticity of Demand is the responsiveness of demand to a change in income.
YED = (% change in quantity demanded / % change in income)

YED > 1 normal goods ( goods with a positive income elasticity of demand)


YED < 1 inferior goods( goods for which an increase in income leads to a fall in demand)


XED.
Cross Elasticity of Demand is the responsiveness of demand for one product to a change in price of another product.
XED = (% change in quantity demanded of a product A / % change in price of a product B)

XED >0 substituted goods
XED < 0 complementary goods