Price elasticity of demand is a measure of the responsiveness of the quantity demanded of a good or service to changes in its price. It helps in understanding how sensitive consumers are to changes in price and how it affects their purchasing decisions. Price elasticity is an important concept in economics as it helps businesses and policymakers determine the impact of price changes on demand and revenue.

Types of Price Elasticity:

1. Price Elasticity of Demand (PED):
- Price Elasticity of Demand measures the responsiveness of quantity demanded to a change in price.
- It is calculated as the percentage change in quantity demanded divided by the percentage change in price.
- PED can be classified into three categories based on the magnitude of the elasticity coefficient:
- Elastic Demand: When the absolute value of the elasticity coefficient is greater than 1, demand is considered elastic. This means that a small change in price leads to a relatively larger change in quantity demanded.
- Inelastic Demand: When the absolute value of the elasticity coefficient is less than 1, demand is considered inelastic. This implies that a change in price has a relatively smaller impact on quantity demanded.
- Unitary Elastic Demand: When the absolute value of the elasticity coefficient is equal to 1, demand is considered unitary elastic. This means that the percentage change in quantity demanded is equal to the percentage change in price.

2. Price Elasticity of Supply (PES):
- Price Elasticity of Supply measures the responsiveness of quantity supplied to a change in price.
- It is calculated as the percentage change in quantity supplied divided by the percentage change in price.
- PES can also be classified into three categories based on the magnitude of the elasticity coefficient:
- Elastic Supply: When the absolute value of the elasticity coefficient is greater than 1, supply is considered elastic. This means that a small change in price leads to a relatively larger change in quantity supplied.
- Inelastic Supply: When the absolute value of the elasticity coefficient is less than 1, supply is considered inelastic. This implies that a change in price has a relatively smaller impact on quantity supplied.
- Unitary Elastic Supply: When the absolute value of the elasticity coefficient is equal to 1, supply is considered unitary elastic. This means that the percentage change in quantity supplied is equal to the percentage change in price.

3. Cross-Price Elasticity of Demand (XED):
- Cross-Price Elasticity of Demand measures the responsiveness of the quantity demanded of one good to a change in the price of another good.
- It is calculated as the percentage change in quantity demanded of one good divided by the percentage change in the price of another good.
- XED can have positive or negative values:
- Positive Cross-Price Elasticity: When the XED is positive, it indicates that the two goods are substitutes. An increase in the price of one good leads to an increase in the quantity demanded of the other good, and vice versa.
- Negative Cross-Price Elasticity: When the XED is negative, it indicates that the two goods are complements. An increase in the price of one good leads to a decrease in the quantity demanded of the other good, and vice versa.

Price elasticity is a crucial concept for businesses to determine pricing strategies and for policymakers to understand the impact of taxation and subsidies on consumer behavior and market equilibrium. It