What is Price Elasticity?
A definition of Price Elasticity
“Price elasticity measures how the quantity demanded of a product changes in response to a change in its price. It helps businesses understand consumer behavior and adjust pricing strategies accordingly.”

Business Glossary > What is Price Elasticity?
Examples of Price Elasticity in a Sentence:
Price elasticity helps determine how sensitive consumers are to price changes.
A high price elasticity means consumers care greatly about price fluctuations.
Knowing the price elasticity of a product can guide pricing decisions.
Why is Price Elasticity Important in Business?
Understanding price elasticity is crucial for businesses to set optimal prices and maximize revenue. It informs companies about consumer sensitivity to price changes, aiding in strategic pricing decisions, promotions, and inventory management.
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Associated Terms
Here are some associated business terms and synonyms for “Price Elasticity”:
- Demand Elasticity
- Elasticity of Demand
- Price Sensitivity
Apple’s Price Elasticity
Apple understands the price elasticity of its products such as iPhones. By analyzing consumer responses to price changes, Apple can decide when to introduce discounts or maintain prices, thus optimizing profit margins.
Final Notes on Price Elasticity
Companies should consider both the elasticity of individual products and market conditions before making pricing decisions. Understanding these nuances can provide a competitive edge and improve profitability.
This has been a definition of Price Elasticity meaning.
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