price elasticity

**Price Elasticity**

Price elasticity measures how the quantity demanded or supplied of a product changes in response to a change in its price. It is a key concept in economics that helps businesses and policymakers understand consumer behavior and market dynamics. A product with high price elasticity experiences significant changes in demand when prices fluctuate, while a product with low price elasticity sees relatively stable demand regardless of price changes. Understanding price elasticity is essential for setting optimal pricing strategies, forecasting sales, and maximizing revenue.