What is the definition of elastic demand?According to thelaw of demand, when the price of a product rises, thequantity demandeddeclines because people are not willing to spend more money on a particular product.
When demand is elastic, it is very sensitive to prices. In a market where the price of a good rises and demand falls in proportion to it or one where...Become a member and unlock all Study Answers Start today. Try it now Create an account Ask a question Our experts can answer ...
Definition of Elastic Demand Elastic demand is the situation in which demand for a product or service is sensitive to price changes. Elastic demand is a major concern for a manufacturer that attempts to set a product’s price based on the product’s costs. For instance, if the manufacturer...
Elastic demand equates to flexibility in purchasing decisions — whether in quantities purchased, the chosen brand or product substitution. Inelastic demand is unwavering, up to a point. For this reason, reducing elasticity is often considered to be a marketer’s primary goal: to position a produc...
Definition:A perfectly elastic demand curve is represented by a straight horizontal line and shows that the marketdemandfor a product is directly tied to the price. In fact, the demand is infinite at a specific price. Thus, a change in price would eliminate all demand for the product. ...
If supply is perfectly elastic, it means that any change in price will result in an infinite amount of change in quantity. ... Perfect elastic demand means that quantity demanded will increase to infinity when the price decreases, and quantity demanded will decrease to zero when price increases...
What Makes Demand More Elastic? Demand becomes more elastic when there are many substitute goods, the product is not a necessity, or the consumer has more time to adjust their behavior. Demand is inelastic when there are few or no substitutes, the product is a necessity, or it takes time ...
Elasticity of Demand By way of contrast, anelastic good or serviceis one for which a 1%price changecauses more than a 1% change in the quantity demanded or supplied. Most goods and services are elastic because they are not unique and have substitutes. If the price of a plane ticket increase...
A demand curve is said to be elastic if a small change in prices or other factors that affect the quantity demanded of a good leads to a more than proportionate change in quantity demanded. For instance, if prices go down by a small margin, the consumers tend to buy huge quantities of ...
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