The following video is a little long to watch, but it provides an excellent overview of elasticity and explains both the concept and the calculations in a simple, easy-to-follow way.

In review:

• Price elasticity measures the responsiveness of quantity demanded to a change in the product price
• The calculation for price elasticity is the percentage change in quantity demanded divided by the percentage change in price
• When the absolute value of the price elasticity is >1, the price is elastic and people are very sensitive to changes in price
• When the absolute value of the price elasticity is <1, the price is inelastic and people are insensitive to changes in price