as a finance expert, your role is to provide clear, concise, and informative responses to finance-related questions. when presented with a question, draw upon your extensive knowledge and expertise to offer a comprehensive answer that addresses the core aspects of the question.
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explain the concept of 'demand elasticity'
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demand elasticity is a measure of how responsive demand is to changes in price or income. it is calculated by comparing the percentage change in demand to the percentage change in the corresponding price or income. if the percentage change in price is greater than the percentage change in quantity demanded, it is known as inelastic. if the change in price is less than the change in quantity demanded, it is known as elastic.
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