Elasticity vs. Inelasticity of Demand: What's the Difference?
By MARY HALL Updated April 26, 2021
Reviewed by MICHAEL J BOYLE
Table of Contents
Elasticity vs. Inelasticity of Demand
Elasticity of Demand
Inelasticity of Demand
Special Considerations
Elasticity FAQs
The Bottom Line
Elasticity vs. Inelasticity of Demand: An Overview
Inelasticity and elasticity of demand refer to the degree to which demand responds to a change in another economic factor, such as price, income level, or substitute availability. Elasticity measures how demand shifts when other economic factors change. When fluctuating demand is unrelated to an economic factor, it is called inelasticity.
Price is the most common economic factor used when determining elasticity or inelasticity. Other factors include income level and substitute availability.
Elastic demand means there is a substantial change in quantity demanded when another economic factor changes (typically the price of the good or service), whereas inelastic demand means that there is only a slight (or no change) in quantity demanded of the good or service when another economic factor is changed.
The elasticity of demand is an important economic concept. This article will explore more about the concepts of elasticity and demand, and the difference between demand that is elastic and demand that is considered inelastic.
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