Elasticity Definition by Classic and Modern Economists

Elasticity definition is different in different disciplines like engineering, biology, math, and economics. J.S Mill and Cournot discussed the concept of elasticity of demand. However, it was defined first time by Dr. Marshall as: “Elasticity of Demand may be defined as the percentage change in the quantity demanded divided by the percentage in the price.”

Later on, different economists designed different definitions of elasticities in economics. You can find some terms like the elasticity of demand, the elasticity of supply, price elasticity, income elasticity, cross elasticity and then different shades under each of them. Instead of making things complicated for us, let’s go to an elasticity definition which seems very comprehensive regarding various elements of elasticity, demand, and supply.

A Comprehensive Definition of Elasticity

Elasticity definition built by William Boyes & Michael Melvin in “Economics” fits this category as:

“By definition elasticity is the measure of the responsiveness of quantity demanded or quantity supplied to a change in price or some other important variable. By ‘responsiveness’ we mean ‘how much quantity demanded or quantity supplied changes with respect to a change in something else.”

Another definition of elasticity seems closer. But it restricts itself to the price elasticity.

“Price elasticity refers to customers’ responsiveness or sensitivity to change in price. A more precise definition defines elasticity as the relative impact on the demand for a product, given specific increase or decrease in the price charged for that purpose.”

(“Marketing Strategy”, O.C. Ferrel & Michael D. Hartline)

Elasticity of Demand and Supply

Some other big names define elasticity of demand as under:

• “Price elasticity of demand measures the responsiveness of the quantity demanded to the change in price” (Prof. Boulding)
• “The price elasticity of demand measures the responsiveness of the quantity demand to a change in its price.” (Dooley)
• “Elasticity of demand is the ratio of relative change in quantity to relative change in price. “ (Antol Murad)
• “Elasticiy of a demand is a measure of the relative change in the amount purchase in response to any change in price or a given demand curve.” (Meyers)
• “When we make proportionate change in the quantity demanded of a commodity due to change in its price, it is known as elasticity of demand. It is a qualitative statement.” (“Managerial Economics and Financial Analysis” by S.A.Siddiqui)
• “The price elasticity of demand measures how much the quantity demanded responds to a change in price.” (“Principles of Microeconomics”. Mankiw)
• The elasticity definition by Paul Anthony Samuelson in his textbook “Economics” covers mathematical angle of the elasticity of supply. “The price elasticity of supply is the percentage change in quantity supplied divided by the percentage change in price.”

Internet Elasticity Definitions

We can find dozens of websites offering elasticity definition in their own ways. A few of them go as under:

• “The relative response of one variable to changes in another variable. The phrase "relative response" is best interpreted as the percentage change.” Amosweb
• “The degree to which a price change for an item results from a unit change in supply (called supply elasticity) or a unit change in demand (called demand elasticity). opposite of inelasticity.” Investorwords
• “A measure of a variable's sensitivity to a change in another variable. In economics, elasticity refers the degree to which individuals (consumers/producers) change their demand/amount supplied in response to price or income changes.” Investopedia

Basic Elements of Elasticity

The elasticity definition made by Robert S. Pindyck & Daniel L. Rubinfeld in their “Microeconomics” contains basic concept and elements of elasticity. They define it as:

“An elasticity measures of sensitivity of one variable to another. Specifically, it is a number that tells us the percentage change that will occur in one variable in response to a 1-percent increase in another variable.”

Supply and Demand for Managers

Origin of Supply and Demand Model

Supply and Demand Lesson

Supply Curve and Elasticities

Perfect Price Elasticity of Supply

Relative Elasticities and Inelasticity of Supply

Exceptions to Demand and Supply