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Elasticity

Published on Nov 20, 2015

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1.

ELASTICITY

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2.

ELASTICITY OF DEMAND dictates how drastically buyers will cut back or increase their demand for a good when the price rises of falls

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3.

Inelastic - describes demand that is not very sensitive to a change in price

Elastic - describes demand that is very sensitive to a change in price

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4.

FACTORS AFFECTING ELASTICITY

  • Availability of substitutes
  • Relative importance
  • Necessities versus luxuries
  • Change over time
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5.

Elasticity is important because it helps measure how consumers respond to price changes for different products

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