What is the coefficient of elasticity?

The coefficient of elasticity, often referred to as the price elasticity of demand or supply, measures the responsiveness of quantity demanded or supplied to a change in price. It is calculated as the percentage change in quantity divided by the percentage change in price. A coefficient greater than 1 indicates elasticity (demand or supply is responsive to price changes), while a coefficient less than 1 indicates inelasticity (less responsive). A coefficient of exactly 1 signifies unit elasticity, where changes in price lead to proportional changes in quantity.