In order for a small-business order to price her products or services correctly, she must be able to understand what impact that price will have on demand. In some cases, demand will rise or fall with ...

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 ...

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 ...

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.

A customer normally buys a cup of coffee and one doughnut on the way to work in the morning. However, for one day only, the coffee shop has dropped the price of doughnuts by 30 percent. The customer ...

Will Kenton is an expert on the economy and investing laws and regulations. He previously held senior editorial roles at Investopedia and Kapitall Wire and holds a MA in Economics from The New School ...

Demand elasticity is a phenomenon where demand for a specific good or service changes depending on factors such as how it is priced, whether alternatives are available or local income trends.