What category does Price Elasticity belong to?

Price Elasticity belongs to the "Concepts" category in personal knowledge management and productivity.

What are the key topics related to Price Elasticity?

Key topics related to Price Elasticity include: pricing, economics, businesses, strategies, analysis.

Price Elasticity

Q: What are alternative names for Price Elasticity?

Price Elasticity is also known as: Demand elasticity, Price sensitivity, Elasticity of demand.

A measure of how sensitive customer demand is to changes in price.

Also known as: Demand elasticity, Price sensitivity, Elasticity of demand

Category: Concepts

Tags: pricing, economics, businesses, strategies, analysis

Explanation

Price elasticity measures demand responsiveness to price changes. Elastic demand means price changes significantly affect quantity demanded (luxury goods, commodities with alternatives). Inelastic demand means customers buy regardless of price changes (necessities, unique products, strong brands). Calculate elasticity as: % change in quantity demanded ÷ % change in price. Elasticity greater than 1 is elastic; less than 1 is inelastic. Understanding elasticity informs pricing strategy: with elastic demand, lower prices can increase revenue; with inelastic demand, you can raise prices without losing customers. For creators, inelastic demand often comes from: unique expertise, strong positioning, loyal audiences, and products addressing urgent needs. Building differentiation reduces price sensitivity.

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