piigsty

Now, the concept of ‘Elasticity’. Its all about how responsive consumers are to changes in the prices of the goods and services they buy every day.

• If the price goes up, and you (as a consumer) want it MUCH less than before, then you are reacting very strongly to a change in its price. The good is said to be price ‘elastic.’
• Similarly if you react very little or not at all (and carry on buying the same amount), then the good is price ‘inelastic.’

Heres the PDF PIIGSTY Econ 101 #10 Elasticity

Heres what all the theory looks like in diagrams…

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