Price Elasticity of Demand

In economics and business studies, the price elasticity of demand (PED) is an elasticity that measures the nature and degree of the relationship between changes in quantity demanded of a good and changes in its price.
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Percentage change in quantity demanded that occurs in response to a percentage change in price.
 

The relationship between the change in the price of a commodity and the corresponding change in the quantity that is sold. If a small change in the price is accompanied by a relatively large change in the quantity sold, demand is said to be elastic (responsive to price changes). But if a large change in the price is accompanied by a small change in the quantity sold, demand is said to be inelastic. The demand for many farm products is relatively price inelastic. As a result of low price elasticity of demand, shifts in supply can have large impacts on prices. For example, the presence of surpluses results in disproportionately large price declines, and conversely shortages result in large price increases. For these reasons, agriculture often is described as an inherently unstable industry.
  

Price elasticity of demand
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