price elasticity

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The ratio of a proportional change in quantity supplied or demanded to a proportional change in price. The price elasticity of supply is εs = (p/q)(dq/dp), where p is price and q is quantity. The price elasticity of demand is often defined as εd = − (p/q)(dq/dp) so that it is positive, but the minus sign is not universally used.

Subjects: Economics — Environmental Science.

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