price elasticity of demand definition
What Is Price Elasticity of Demand. Price elasticity of demand is the relationship of consumer response to change in price of a product or service. The degree of change along the demand curve relative to the degree of change in price will more clearly show the effect of a price change. The formula, Price Elasticity of Demand = % of change in Quantity Demanded / % of change in Price, provides the change for unit demand for each unit change in price.