Own-Price Elasticity of Demand

Elasticity is a general measure of how sensitive one variable is to any other variable, and it is expressed as the ratio of percentage changes in each variable: %Δy/%Δx.

When the magnitude of the own-price elasticity coefficient has a value of less than one, demand is said to be inelastic.

When that magnitude is greater than one, demand is said to be elastic.

And when the elasticity coefficient is equal to negative one, demand is said to be unit elastic, or unitary elastic.