Concept of Elasticity of Demand
The concept of elasticity of demand was first introduced by classical economist A.A COURNOT and J.S. MILL. Later on, Neo-classical economist ALFRED MARSHALL developed it in a scientific way in his book entitled ‘principle of economics’ published in 1890 AD.
The elasticity of demand is the measure of the responsiveness of demand for a commodity to the change in any of its determinants. Marshal developed this concept with reference to price. So, it is also referred to as price elasticity of demand.
According to Alfred Marshall, “The elasticity of demand in a market is great or small according to as the amount demanded increases much or little for a given fall in price and diminishes much or little for a given rise in price.”
According to R.G Lipsey, “Elasticity of demand may be defined as the ratio of the percentage change in the demand to the percentage change in the price.”
Types/ Degrees of Elasticity of demand
The major types of elasticity of demand are as follows:-