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- Elastic vs. inelastic products can be understood through the concept of price elasticity of demand12. Here are the key points:
- Elastic goods: Consumers are highly sensitive to price changes. Lowering prices can attract new customers and potentially increase total revenue.
- Inelastic goods: Consumers are less responsive to price changes. Small price increases might not significantly impact sales volume, potentially leading to higher profits12.
Learn more:✕This summary was generated using AI based on multiple online sources. To view the original source information, use the "Learn more" links.For elastic goods, lowering prices can attract new customers and potentially increase total revenue. Conversely, for inelastic goods, small price increases might not significantly impact sales volume, potentially leading to higher profits.penpoin.com/supply-and-demand-elasticities-in-ec…Price elasticity of demand measures the responsiveness of quantity demanded to a change in price. If PED is greater than 1, demand is elastic, meaning consumers are highly sensitive to price changes. If PED is less than 1, demand is inelastic, indicating that consumers are less responsive to price changes.economicinsider.com/elasticity-of-demand-underst… - People also ask
Elasticity vs. Inelasticity of Demand: What's the Difference?
Elasticity and inelasticity of demand refer to the degree to which demand responds to a change in an economic factor. Price is the most common economic factor used when determining elasticity. Other factors include income level and substitute availability. Goods and services are elastic when demand … See more
The elasticity of demand measures how demand responds to a change in price or income. An elastic good is defined as one where a change in price leads to a significant shift in … See more
There are two other main types of elasticity of demand in addition to price elasticity and inelasticity of demand. They are referred to as the cross elasticity and advertising elasticity … See more
Elasticity of demand occurs when demand respondsto changes in price or other economic factors. Inelasticity of demand means that demand … See more
Inelastic demand is evident when demand for a good or service is relatively static even when its price changes. Inelastic products are usually necessities without acceptable substitutes. As such, these products are things that people need in their day-to-day lives … See more
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