elasticity of demand


A measure of how much the demand for a good or service increases or decreases in response to changes in price. A necessary good such as water or a service such as medical care might have low elasticity, since demand for such goods and services remains relatively stable at nearly any price.

Use this term in a sentence

My boss likes being a supplier of gasoline because he believes people will buy it regardless of the price and it has low elasticity of demand.

​ Was this Helpful? YES  NO 13 people found this helpful.

You need to know what the elasticity of demand on your product is and adjust accordingly to it at all times.

​ Was this Helpful? YES  NO 12 people found this helpful.

The elasticity of demand for the Wii U electronic gaming system has increased due to the rise and demand of games out side of the country.

​ Was this Helpful? YES  NO 5 people found this helpful.

Show more usage examples...

Related Terms

Browse Definitions by Letter: # A B C D E F G H I J K L M N O P Q R S T U V W X Y Z
elasticity of an option inferior good