Elasticity (economics)

Elasticity in economics is a concept that explains how a change in one variable (like the price of a good or service) affects the demand for that good or service. For example, if the price of a good or service increases, the demand could go down - meaning people will buy less of the good or service. This is called "price elasticity of demand" - meaning a change in price will have a big effect on the demand for the good or service. Elasticity can also be used to measure how changes in other variables, like income or availability of related goods, affect demand for a good or service.