Price Elasticity 2017-08-10T17:52:13+00:00

Price ElasticityPrice elasticity tells you how much a price increase or decrease will impact on the demand of a product i.e. Volume or quantity of products sold. Price elasticity is a function of price in which price can be perfectly inelastic (the change in price has no effect on sales volumes) or perfectly elastic (in which even a small change in price has an huge effect on volumes). The elasticity levels are: Perfectly inelastic (no change in volume) relatively inelastic (change in volume is less than in price), unit elastic (the change in percentage is the same in volume and price), relatively elastic (the percentage change in volume is greater than that in price – so raising the price already affects to sales negatively), perfectly elastic (any change in price will drop the volumes to zero immediately)