Unit 3: Elasticity Our mission is to provide a free, world-class education to anyone, anywhere. Khan Academy is a 501 (c) (3) nonprofit organization. Donate or volunteer today!

An elastic demand or elastic supply is one in which the elasticity is greater than one, indicating a high responsiveness to changes in price. An inelastic demand or inelastic supply is one in which elasticity …

Learn about the price elasticity of demand, a concept measuring how sensitive quantity is to price changes. Elasticity is calculated as percent change in quantity divided by percent change in price.

What we're going to think about in this video is elasticity of demand-- tis-sit-tity, elasticity of demand. And what this is, is a measure of how does the quantity demanded change given a change in price?

Elasticity of demand is not the slope of the curve. The percentage part of the equation is crucial. Use the formula Sal gives and test it by yourself. On a straight line, elasticity will be highest near the vertical …

The elasticity of supply or demand can vary based on the length of time you care about.

Elasticity is a general term, referring to percentage change of one variable divided by percentage change of a related variable that can be applied to many economic connections.

So we define elasticity of supply, we define it as percent change in quantity over percent. The Greek letter delta, this triangle, that's just shorthand for change, percent change in price.

Now, it's important to note that the elasticity of demand, or actually supply, is not always constant for a given product. In fact, it can change at different price points.

Unit 3: Elasticity Price elasticity of demand Price elasticity of supply Income elasticity of demand and cross-price elasticity of demand