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Elasticity measures the sensitivity of demand and supply to price changes.
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Demand elasticity helps consumers adapt to price fluctuations and make smarter budget decisions.
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Highly elastic markets undergo fierce competition and price-sensitive consumers.
The influence of price changes on demand and supply is measured through price elasticity. When Demand or supply respond significantly to price movements, they are considered to be elastic. Inelastic demand or supply reacts less to changes in price. Understanding elasticity helps predict market reactions to economic shifts.
Demand elasticity depends on the availability of substitutes. Necessities like food and gasoline have inelastic demand as consumers will continue purchasing them despite price hikes. Luxury goods with many alternatives, like new cars, have elastic demand that is susceptible to the influence of pricing.
Supply elasticity measures how output responds to price changes.
We współpracy z: https://www.thecoinrepublic.com/2023/09/10/price-elasticity-how-it-impacts-buyers-businesses-and-markets/
