# How does elasticity change as prices increase?

Aug 29, 2015

Elasticity will change with an increase in its price.

#### Explanation:

Price : Quantity
15 : 1
10 : 5
5 : 10

When the price increases from $.5 to$.10, the quantity demanded decreases from 10 units to 5 units.

Elasticity in this segment is =(% Delta QD )/(% Delta P) = (50%)/(100%) = 0.5 < 1

When the price increases from $.10 to$.15, the quantity demanded decreases from 5 units to 1 unit.

Elasticity in this segment is =(% Delta QD )/(% Delta P) = (80%)/(50%) = 1.6 > 1