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--- en:types-of-elasticity [2015/07/28 10:12]
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 ====== Types of Elasticity ======
+The elasticity is the relative change of the value of a function in relation to the relative change on the value of an input.
+In economics, supply and demand functions have several inputs: the price of the good, the price of other goods and the income.
+When we calculate the elasticity of demand taking the price of the good that we are analyzing into account, we are calculating the **price elasticity of demand**.
+When we take the price of other goods into account, we are calculating the **cross elasticity of demand**.
+When we measure the change in the demand of a good, when the income changes, we calculate the **income elasticity of demand**.
+The value of the elasticity can be:
+  * Less than -1 (-∞ < e < -1) : we say that this part of the demand is relatively elastic.
+  * Between -1 and 0 (-1 < e < 0): inelastic.
+  * -∞ : perfect elastic.
+  * 0 : perfect inelastic.
+  * -1 : unit elastic. This point of the demand function has an unitary elasticity.