Answer/Explanation:
The elasticity of Demand and Supply is regarded as the degree of responsiveness to the changes in the demand or supply of goods and services, influenced mainly by the increase or decrease in the price of the goods and services.
The law of demand states that 'all things being equal, the higher the price, the lower the quantity of goods demanded; while the lower the price, the higher the quantity of goods demanded'.
Conversely, the law of supply states that 'all things being equal, the higher the price, the higher the quantity of goods supplied, while the lower the price, the lower the quantity of goods supplied'.
These two concepts of Elasticity of Demand and Elasticity of Supply share some similarities as well as differences. The main similarity between the elasticity of demand and supply is:
1. Both concepts are interconnected, in that they both focus on how the change in the price of commodity affects the responsiveness of demand or supply the commodity.
Some of the differences between the elasticity of demand and supply include:
1. The two concepts respond differently to changes (increase/decrease) in price, for instance, while demand decreases as price increases, supply increases as price increases.
2. Also, while the concept of elasticity of demand focuses specifically on the effect of price on demand, the concept of elasticity of supply focus on how the change in price will affect supply.