Important Notice: Our web hosting provider recently started charging us for additional visits, which was unexpected. In response, we're seeking donations. Depending on the situation, we may explore different monetization options for our Community and Expert Contributors. It's crucial to provide more returns for their expertise and offer more Expert Validated Answers or AI Validated Answers. Learn more about our hosting issue here.

What exactly is price elasticity?

0
Posted

What exactly is price elasticity?

0

Price elasticity is defined as the responsiveness of quantity of a good to a change in price. Thus, it is possible to have price elasticity of demand and supply. When something is elastic it is said to be responsive to a change in price; that is, a change in price will cause a greater than proportionate change in quantity demanded/supplied. If it is inelastic a change in price will cause a less than proportionate change in demand or supply for that good or service. Factors that affect price elasticity of demand include whether the good is a necessity or a luxury (necessities are inelastic because people must buy at any price), whether it has other substitutes (if the price of a good increases the consumer can switch goods), the proportion of income it takes up (relatively cheap goods are inelastic) and how much time the consumer has to react to it. Regarding the share market, most shares would be elastic as there are many shares to choose from – an increase in price of one share might

Related Questions

Thanksgiving questions

*Sadly, we had to bring back ads too. Hopefully more targeted.