Pin It. View Slideshow Â»Â». Fun in the sun! Celebrity trainer Jillian Michaels and her partner Heidi Rhoades hit the beach with their two children â daughter Lukensia, 3, and 18-month-old son Phoenix â in Miami, Florida on Tuesday (November 12).
Elasticity is the ratio of the % change in quantity to the % change in price. So if the two are identical, than it is said to be unitary elastic. If quantity changes more than price, then it is said to be elastic. If the quantity changes less than price, then it is said to be inelastic.
Elastic demand is when the quantity to price ratio is more than 1. In other words, if the price dropped 10%, and the quantity demanded rose 50%, then the ratio would be .5/.1 = 5. At the other extreme, if the price dropped 10% and the quantity demanded didn't change, then the ratio would be 0/.1 = 0. This is known as being perfectly inelastic. Therefore, inelastic demand occurs when the ratio of quantity demanded to price is between zero (perfectly inelastic) and one (unit elastic).