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responsive an economic variable is to a change in another. For example:
"If I lower the price of my product, how much more will I sell?"
"If I raise the price of one good, how will that affect sales of this other good?"
"If we learn that a resource is becoming scarce, will people scramble to acquire it?"
An elastic variable (or elasticity value greater than 1) is one which responds more than proportionally to changes in other variables. In contrast, an inelastic variable (or elasticity value less than 1) is one which changes less than proportionally in response to changes in other variables.
"If I lower the price of my product, how much more will I sell?"
"If I raise the price of one good, how will that affect sales of this other good?"
"If we learn that a resource is becoming scarce, will people scramble to acquire it?"
An elastic variable (or elasticity value greater than 1) is one which responds more than proportionally to changes in other variables. In contrast, an inelastic variable (or elasticity value less than 1) is one which changes less than proportionally in response to changes in other variables.
