<Dd> E d = P 1 + P 2 2 Q d 1 + Q d 2 2 × Δ Q d Δ P = P 1 + P 2 Q d 1 + Q d 2 × Δ Q d Δ P (\ displaystyle E_ (d) = (\ frac (\ frac (P_ (1) + P_ (2)) (2)) (\ frac (Q_ (d_ (1)) + Q_ (d_ (2))) (2))) \ times (\ frac (\ Delta Q_ (d)) (\ Delta P)) = (\ frac (P_ (1) + P_ (2)) (Q_ (d_ (1)) + Q_ (d_ (2)))) \ times (\ frac (\ Delta Q_ (d)) (\ Delta P))) </Dd> <P> This method for computing the price elasticity is also known as the "midpoints formula", because the average price and average quantity are the coordinates of the midpoint of the straight line between the two given points . This formula is an application of the midpoint method . However, because this formula implicitly assumes the section of the demand curve between those points is linear, the greater the curvature of the actual demand curve is over that range, the worse this approximation of its elasticity will be . </P> <P> 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 . </P> <P> The overriding factor in determining PED is the willingness and ability of consumers after a price change to postpone immediate consumption decisions concerning the good and to search for substitutes ("wait and look"). A number of factors can thus affect the elasticity of demand for a good: </P>

Who gave the concept of elasticity of demand