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 formula for calculating price elasticity of demand is: Price Elasticity of Demand = % Change in Quantity Demanded / % Change in Price. If a small change in price is accompanied by a large change in quantity demanded, the product is said to be elastic (or responsive to price changes).