Elasticity (economics)
From Simple English Wikipedia, the free encyclopedia
- The basic definition of the word is at elastic
In economics, people talk about elasticity of supply, or demand, or of price.
If the price for an item with an elastic demand goes up, the demand for it will go down. For example, people will buy fewer DVDs if DVDs get more expensive. DVDs have an elastic demand.
If an item has inelastic demand, the demand for it will not be affected by the price of it. For example, if the price of salt or drugs increases, people will not buy less of it. They need their daily salt or drug intake. The demand of salt and drugs is therefore inelastic.
| Topics in microeconomics |
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| Scarcity • Opportunity cost • Supply and demand • Elasticity • Economic surplus • Economic shortage • Aggregation of individual demand to total, or market, demand • Consumer theory • Production, costs, and pricing • Market forms • Welfare economics • Market failure |
