Does elasticity of demand include the change in quantity/change in price, or is it the percentages of the change in quantity over the percentage change in price?
I am getting confliciting answerrs online…
You might be finding conflicting answers because your question might be misleading. When you ask whether it includes the change in quantity/price or percentage change the answer would be YES to both. The elasticity of demand is defined as:
EofD=( ChangeinQuantitiy /Quantity)/( ChangeinPrice /Price)
Now that includes clearly the change in quantity and change in price , in the nominator and denominator. If you look at the end result, i.e.the ratios in the nominator and denominator, you have the percentage change, ChangeinQuantitiy /Quantity and ChangeinPrice /Price.
Imagine the change in quantity is 2 units and the quantitiy is 100. Then 2 over 100 gives you 0.02, a 2% percent change.