Key Term: Elasticity of Demand

elasticity of demand

Elasticity of Demand is how responsive consumers are to changes in prices. Elastic prices are very sensitive. Some things can easily be replaced if their prices increase. But if the price of gas increases people are stuck. In the article Age of Platform, elasticity is described as having to do with a company’s monopolistic power especially in the short term. When a company is more powerful it is easier for them to survive when prices increase rather than smaller companies.

 

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