The law of demand indicates the direction of change in quantity demanded in response to a change in price. It does pot precisely express the magnitude of change in amount demanded in response to a change in price. This information is provided by the tool of elasticity of demand. The concept of elasticity of demand refers to the degree of responsiveness of quantity demanded of a good to a change in its price.
Price elasticity means the rate of change of quantity demanded as a result of change in price. According to Marshall “the elasticity (or responsiveness) of demand in a market is great or small according as the amount demanded increases much or little for a given fall in price or diminishes much or little for a given rise in price”. The demand is said to be inelastic if the quantity demanded responds very little or unresponsive to the change in price.
The demand is said to elastic if quantity demanded responds remarkably to the change in price of it. Elasticity of demand differs with different commodities. For the same commodity elasticity of demand differs from person to person. There are certain factors that play a very major role in determining the elasticity of demand.