Elasticity and Pricing

The concept of elasticity is an economic term that describes the change in the behavior of the buyers and sellers in the response to the price 

change for goods and services. There are three concepts of elasticity of demand which refers to the degree of responsiveness of quantity 

demanded for the goods to change in price, income, and prices of the related goods. The three concepts of demand elasticity, price elasticity, income elasticity, and cross elasticity. Elasticity of demand is an important which is classified as elastic, inelastic, or unitary. Elastic demand is one that changes in quantity demanded due to the change in price. The quantity changes slower than the price. The price elasticity of supply 

is the percentage change in quantity supplied divided by the percentage change in price. This means the increase in price leads to a higher 

supply.

Prices also affect producers because the higher prices of supplies can cause producers to make the executive decision whether to or not make more products. So, the prices have a direct effect on consumers because when the prices increase, the quantity decreases.

High prices affect consumers and when they increase the price result will result in lower demand. Price inelasticity of the product maybe caused by the presence of a more affordable alternatives in the market and might mean that product is considered nonessential by the consumer.

Consumers prefer smaller discounts over the rare larger value discounts or promotional offers. Consumers will shop the competition that offers prices that are cheaper.

Business considers the price of elasticity of demand when they make decisions about pricing their products. Elastic and inelastic demand 

influences price decisions by a company to maximize profit. For elastic products to drive more sales volume they will reduce prices. In

inelastic products they increase prices to drive higher margins with limited on units that are sold. Reducing costs will increase profitability but 

only if sales prices and number of sales remain constant. If the reductions in lowering the quality of products, then the company may be forced to reduce 

prices to remain at the same level of sales.

Inflation can both positively and negatively have an effect on the economy. Negatives effects on inflation cay possible cause shortages of 

goods because people buy in bulk in the fear the at the price will increase.

Elastic and inelastic goods have definitely affected my shopping when it comes to food. Im always buying the alternative goods because the   prices have gone out of site. I would say I cook differently picking recipes that will feed us all but not cost as much as we normally bought. 

Henrietta Armenta

Good evening.

Elasticity in economics is used to measure the change in quantity demanded of a good or service in relation to price movements of that good  or service. A product is considered to be elastic when the quantity demanded for a ptoduct changes more than the price increases or               decreases.

Higher prices affect consumers by allowing them to purchase less When a price is higher or increases the When a price is higher on supplied may cause producers to make a decision as to whether or not to make more products. When a price of a product increases the quantity of a good decreases. When the price of a good decreases the quantity of a good increases.

Changes in an elastic good that has affected my purchasing lifestyle would the the increase in cost for vehicles. I was looking into getting a car for my son, but because all business were affected majorly by covid, the prices are a little too high. Dealerships are offering rebates to try and make sales right now.

An inelastic good that has affected my purchasing lifestyle as well would be the cost for gasoline. Prices are super high right now and continue to slowly increase, but majority have vehicles that need gasoline so we will pay whatever the price is regardless.