Price elasticity of demand is the relationship between a change in price and the corresponding change in quantity.

It tells you how sensitive the quantity demanded is to a change in price. Businesses look at this very closely because it helps them in their pricing decisions. And in evaluating how much business may be gained or lost when prices are raised or lowered.

How can a seller determine whether the demand for his or her good is inelastic, elastic, or unit elastic between two prices?