Elasticity?

Question

Can someone explain to me what elasticity is? Like.. what does it mean when something is inelastic/elastic? Please also explain elasticity of demand and elasticity of supply?

I don't understand! It's for my economy class for those that are wondering.

Answer 1

One definition of elasticity is what happens to consumer demand for a good (for example, apples) when prices increase. As the price of a good rises, consumers will usually demand a lower quantity of that good, perhaps by consuming less, substituting other goods, and so on. The greater the extent to which demand falls as price rises, the greater the price elasticity of demand. Conversely, as the price of a good falls, consumers will usually demand a greater quantity of that good, by consuming more, dropping substitutes, and so forth. However, there may be some goods that consumers require, cannot consume less of, and cannot find substitutes for even if prices rise (for example, certain prescription drugs). For such goods, the price elasticity of demand might be considered inelastic.

Further, elasticity will normally be different in the short term and the long term. For example, for many goods the supply can be increased over time by locating alternative sources, investing in an expansion of production capacity, or developing competitive products which can substitute. One might therefore expect that the price elasticity of supply will be greater in the long term than the short term for such a good, that is, that supply can adjust to price changes to a greater degree over a longer time.

Hope this may help you.

Good luck!!!

Answer 2

elasticity is that big jelly roll around the mid section of your body, plenty of supply and very little demand.