Measure of the degree of responsiveness of one variable (the dependent variable) to changes in another (the independent variable), where a causal relationship is observed to exist. Demand is considered clastic when a decrease in price results in an increase in total revenue. It is inelastic when the reduction results in a decrease in total revenue. Unit elasticity means volume increases sufficiently to compensate for loss of revenue. Zero elasticity is the term used to define a change in price where no change in demand results.
Home Elasticity of demand
