The Great Upheaval. A Spontaneous Eruption. It started with a 10% pay cut. When leaders of the Baltimore and Ohio Railroad Company ordered this second reduction in less than eight months, railroad workers in Martinsburg, West Virginia decided they had had enough.
(1) The Percentage Method: The price elasticity of demand is measured by its coefficient E p. This coefficient E p measures the percentage change in the quantity of a commodity demanded resulting from a given percentage change in its price: Thus. Where q refers to quantity demanded, p to price and â to change. If E p p p = 1 demand is unitary elastic.
The price elasticity of supply measures how the amount of a good that a supplier wishes to supply changes in response to a change in price. In a manner analogous to the price elasticity of demand, it captures the extent of horizontal movement along the supply curve relative to the extent of vertical movement. If the price elasticity of supply is zero the supply of a good supplied is totally inelastic and the quantity supplied is fixed.