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The elasticity of demand, also known as the price elasticity of demand, measures the responsiveness of demand to price changes of a product. In other words, demand elasticity is another perspective of economic analysis where the sensitivity of demand for a product is gauged in relation to other variables of economics. It’s vital as it facilitates organizations to forecast and take proactive measures as and when there is fluctuation in demand causing price of products to fluctuate as well.

Organizations can attain optimum competitive advantage with demand elasticity. Demand elasticity essentially measures the effect of change in an interdependent factor on volume demanded. Price elasticity of demand for example measures how price can control demand for a specific volume. It’s vital to set prices so that profit can be maximized.

With elastic price elasticity of demand, ideally lower prices would cause a surge in demand which in turn would enhance revenue. On the contrary, with inelastic price elasticity of demand, prices ought to be increased as demand would decline marginally but there would be an increase in revenue as a whole. Unit elasticity of price elasticity of demand would not affect revenue even if price is altered as price and quantity both would have to be altered.

Categorizations of products in demand are either

  • perfectly elastic
  • elastic
  • unitary elastic
  • inelastic or
  • perfectly inelastic

according to demand elasticity.

The tutors of Assignments4U are hugely popular among students as they provide solution to homework and assignments.  When students have demand elasticity homework help is instantly available on demand. Due to tricky demand elasticity assignments help from our tutors are invaluable for students.

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