Answer the following question :
Explain the concept of Elasticity of Demand
The word ‘elasticity’ means flexibility or responsiveness. Accordingly, elasticity of demand refers to the responsiveness of demand to the change in various determining factors. We know that the demand for a good depends on a number of factors such as its price, income, tastes, preferences and the price of related goods. Thus, elasticity of demand helps in estimating the change in demand that results from the change in one or more of these factors.