Definition Price elasticity of demand is defined as the measure of the responsiveness of the quantity demanded of a good as a result of the change in the price of the same good. In other words, it is the percentage change in quantity demanded based on the percentage change in the price of the same commodity. In economic and business studies, the price elasticity of demand (PED) is a measure of the sensitivity of quantity demanded to changes in price. It is measured as elasticity, that is, it measures the relationship as the ratio between the percentage variations between the quantity demanded of a good and the variations in its price. Interpretation of elasticity Value Meaning = 0 Perfectly inelastic.0 > n > -1 Relatively inelastic.n = -1 Unitary (or unit) elastic.-1 > n > -∞ Relatively elastic.n = -∞ Perfectly elastic.A fall in price usually results in an increase in the quantity demanded by consumersThe demand for a good is relatively inelastic when the change of the quantity demanded is less than the change in price. Goods and services for which there are no substitutes are generally inelastic. Perfectly inelastic demand Perfectly elastic demand Elasticity and revenues When the elasticity of demand with respect to the price of a good is inelastic (|Ed| < 1), the percentage change in the quantity demanded is lower than that of the price. So, when the price increases, the producers' total revenue increases, and vice versa. When the price elasticity of demand for a good is elastic (|Ed| > 1), the percentage change in quantity demanded is greater than that in price. . So, when the price increases, producers' total revenue decreases, and vice versa. When the price elasticity of demand for a good is unitary elastic (or unit elastic) (|Ed| = 1), the percentage cha... ... in the middle of the paper ... is actually asked to repurchase the entertainment they previously purchased. Adoption remains low, which keeps prices high, which continue to drive consumers away. The difference between the move from discs to CDs and the move from DVDs to Blu-rays is that people can now download media, and that's an option Sony can't make go away. Heck, even the content side of the company can't afford to ignore users who want to download content. Maybe Sony will eventually lower Blu-ray prices, but by then it might be too late. This is not a company swimming in profit. In its 2008 annual report, reported net earnings were less than 4.2%. This has almost fallen into retailer profitability territory. Of course, this could explain the push towards premium prices. If the company makes that little profit when charging a lot, what color would the ink be if prices were more competitive??