Supply and demand elasticity

Abstract

We have so far focused on specifying qualitative relationships between determinants of supply and demand and the actual quantity demanded and quantity supplied of a good. Although qualitative relationships provide meaningful information, they cannot measure the impact produced by a change in a particular determinan on the quantity demanded or supplied of a commodity. In the business world especially, we need to know the quantitative impact of a changed in one determinant such as Price, income or the Price of inputs on the quantity demanded or quantity supplied of a commodity. Quantitative impacts are also often important in the public policy arena.