Quantitative analysis of Demand

Consumption of more good happens due to lower goods', price higher income of consumer, lower price of compliments of goods.

This is the qualitative discussion which gives us only the direction of quantity  demanded not the size change.

Economists brought the concept of elasticity to solve this.
Elasticity is the measure of responsiveness of quality demanded are supplied to a change in one of it's determinants.
Two different type of elasticity is-
1. Elasticity of demand
2. Elasticity of supply

Discussions about elasticity of demand:
Elasticity of demand has three types-

1. Price elasticity demand- It measures how much the quantity demanded respondes to a change in price.
PED varies with variation of incoming price.
               PED=(dQ/dP)×P/Q
P- product
Q- quantity of product

PED value                          Type of Demand
0 to -1                                  Inelastic    
<-1                                        Elastic
2.cross price Elasticity demand-It measures the quantity demanded of one good responds to a change in the price of another good.

CPED value                   Type of Demand
1                                     Unit
<1                                  Inelastic
>1                                   Elastic

3.Income elasticity demand-it is the measure of how much the quantity demanded of a good respondes to change in consumers income.

Interior goods- probability of purchasing decreases with increasing income. Elasticity is negative.
Normal goods- It has division on the basis of income.
When income is less we prioritise our necessity only.
With more income we go for luxury.