## Price Elasticity of Demand Formula and Interpretation

In this first lesson on elasticities we’ll learn the definition, formula and interpretations of the price elasticity of demand (PED) coefficient.

Part 1

Part 2

## The Determinants of Price Elasticity of Demand

In this second lesson on elasticity we’ll outline the factors that affect the relative price elasticity of demand for a good, summarized by the useful acronym “SPLAT”.

## Price Elasticity of Supply and its Determinants

This lesson introduces the concept of price elasticity of supply, including the formula, calculating PES, and an explanation of the determinants of PES. The responsiveness of producers of two goods, cotton and blue jeans, are illustrated as an example of how PES may vary for different goods.

## Cross Price Elasticity of Demand (XED) and its Determinants

This lesson introduces the concept of cross price elasticity of demand, or the responsiveness of consumers of one good to a change in the price of a related good. We’ll outline the formula, walk through a couple of examples, interpret the results and discuss what factors determine the cross price elasticity of demand between two goods.