History
Together with the concept of an economic "elasticity" coefficient, Alfred Marshall is credited with defining PED ("elasticity of demand") in his book Principles of Economics, published in 1890. He described it thus: "And we may say generally:— the elasticity (or responsiveness) of demand in a market is great or small according as the amount demanded increases much or little for a given fall in price, and diminishes much or little for a given rise in price". He reasons this since "the only universal law as to a person's desire for a commodity is that it diminishes... but this diminution may be slow or rapid. If it is slow... a small fall in price will cause a comparatively large increase in his purchases. But if it is rapid, a small fall in price will cause only a very small increase in his purchases. In the former case... the elasticity of his wants, we may say, is great. In the latter case... the elasticity of his demand is small." Mathematically, the Marshallian PED was based on a point-price definition, using differential calculus to calculate elasticities.
Read more about this topic: Price Elasticity Of Demand
Famous quotes containing the word history:
“There are two great unknown forces to-day, electricity and woman, but men can reckon much better on electricity than they can on woman.”
—Josephine K. Henry, U.S. suffragist. As quoted in History of Woman Suffrage, vol. 4, ch. 15, by Susan B. Anthony and Ida Husted Harper (1902)
“He wrote in prison, not a History of the World, like Raleigh, but an American book which I think will live longer than that. I do not know of such words, uttered under such circumstances, and so copiously withal, in Roman or English or any history.”
—Henry David Thoreau (1817–1862)
“It may be well to remember that the highest level of moral aspiration recorded in history was reached by a few ancient Jews—Micah, Isaiah, and the rest—who took no count whatever of what might not happen to them after death. It is not obvious to me why the same point should not by and by be reached by the Gentiles.”
—Thomas Henry Huxley (1825–95)