Do not assume that if you lower your prices, demand will increase enough to make up the difference in income you will receive for products and services. Also, you should not assume that if you raise ...

The challenge is wrapping your head around the difference between elasticity and inelasticity of demand. Elasticity of demand measures how much the demand for a product or service changes relative to ...

Price elasticity measures how demand changes with price adjustments; key for investment decisions. Investors should focus on companies developing inelastic products for greater pricing power.

Investopedia contributors come from a range of backgrounds, and over 25 years there have been thousands of expert writers and editors who have contributed. Somer G. Anderson is CPA, doctor of ...

Claire Boyte-White is the lead writer for NapkinFinance.com, co-author of I Am Net Worthy, and an Investopedia contributor. Claire's expertise lies in corporate finance & accounting, mutual funds, ...

Elasticity is a method of measuring the likelihood of one economic factor affecting another, such as when the price of an item affects consumer demand or when supply affects how much something costs.

Sudden demand surges or supply chains snarls will drive prices up quickly. Businesses face two issues when this happens, First, when a price rises sharply, how long will it take for increased supply ...