
ELASTICITY, E, or "price elasticity of demand", is then defined as follows:

Problems involving Elasticity will start with a relationship between p and q. The student will be asked to find the Elasticity at a particular value of p.
Example problem: If [q = p^{2}] , find the Elasticity , E, at p = 2.
Solution:
Differentiate to find 
dq dp 
= 2p^{3}. 
At p = 2, 
dq dp 
=  2 / 8 = 0.25, and [q / p] = [¼ / 2] = 1/8 
Therefore , Elasticity , E =  ( 0.25) / (1/8) = +2