The "concept of elasticity of demand" measures the relationship between a change in the price of a product and the corresponding change in the quantity demanded of that product. The elasticity of demand may be perfectly elastic, perfectly inelastic or somewhere between the two.Know More
Elasticity of demand is found by dividing the percentage of the change in quantity by the percentage of the change in price. If the quotient is zero, demand is perfectly inelastic, which means that a change in price yields no change in the quantity demanded. If the quotient is one, demand is perfectly elastic, which means that a change in price yields an equivalent change in quantity demanded. Most goods fall somewhere between perfectly inelastic and perfectly elastic. Businesses use demand elasticity to predict the effect of price on product sales.
Elasticity of demand is determined by several factors, including the availability of substitute products, the cost of switching between products, and whether the product is a necessity or a luxury. Products that have readily available substitutes tend to be more elastic than goods with few substitutes. Necessities tend to be more inelastic than luxuries. Products with high-switching costs are more inelastic than goods with lower-switching costs.Learn more about Marketing & Sales
The price elasticity of demand is important because it illustrates the effect that a change in price has on the quantity demanded of a particular good. It may be perfectly elastic, perfectly inelastic or somewhere between the two.Full Answer >
Price elasticity of demand has four determinants: product necessity, how many substitutes for the product there are, how large a percentage of income the product costs, and how frequently its purchased, according to Economics Help. By using these determinants, businesses can estimate how a change in the price affects demand.Full Answer >
Laws and regulations vary from state to state on the resale of marine equipment and depend on the quantity, type and legal ownership of the equipment being sold. Transactions involving ones personal property do not require that the seller be licensed unless the individual is acting in a retail capacity.Full Answer >
Direct marketing is an advertising strategy that physically deals and communicates with the consumer, while indirect marketing advertises in quantity by mass media outlets, such as Internet, TV and radio ads. Direct marketing methods include telemarketing, subscriptions and fliers.Full Answer >