ELASTIC

ELASTIC

• Supply & demand for a good or service can vary due to the price .

ELASTIC

• The elasticity can vary according to the amount of close subtitutes

EXAMPLES OF ELASTIC GOODS..

• Furniture
• Motor vehicles
• Transportation services

HOW IT WORKS

• If the quantity demanded changes a lot when prices change a little,a product is said to be elastic.

WHY IT MATTERS:

• It describes the fundamental relationship between the price of a good & the demand for that good

ELASTICITY

• Measures how responsive demand is to change in price of given good.
• It is the percent change in quantity demanded relative to a 1 percent cahnge in price