To find price elasticity of demand, which condition must be met?

To determine price elasticity of demand, it is essential that prices change while holding other factors constant. This condition allows the analysis to focus specifically on how changes in price affect the quantity demanded, without the influence of other variables that could skew the results.

Price elasticity of demand measures the responsiveness of quantity demanded to a change in price. By isolating the price as the variable that changes, economists can accurately assess the elasticity. All other factors, such as consumer preferences, income, and prices of related goods, need to remain unchanged so that their influence does not confound the relationship being analyzed.

While the other conditions may involve aspects of economic analysis, they do not fundamentally pertain to the calculation of price elasticity of demand. For instance, constant supply is relevant when discussing market equilibrium but does not directly affect the demand side elasticity. Similarly, a requirement for quantity demanded to decrease does not reflect the measure of elasticity itself, since price elasticity can be positive or negative depending on whether demand is elastic or inelastic, regardless of whether demand increases or decreases. Income remaining unchanged could be relevant in broader economic contexts but does not directly relate to the definition of price elasticity of demand.