Types of Elasticity of Demand

Basically, there are three(3) types of elasticity of demand (Ed), which are as follows:

1) Price Elasticity of Demand (Ep)
2) Income Elasticity of Demand (EY)
3) Cross Elasticity of Demand (Exy)

1. Price Elasticity of Demand (Ep):

It is defined as the proportionate change in quantity demanded for a commodity due to proportionate change in its price, other things remaining the same. In other words, it is the ratio of percentage change in quantity demanded for a commodity and it's price. Price elasticity of demand is always negative because there is always an inverse relationship between quantity demanded for a commodity and it's price. 

Interpretation:
Ep=-2
It means that 1% increase in price leads to 3% decrease in its quantity demanded and vice versa.

Chapter 3 Part 2