Why it matters Why price elasticity of demand matters. In practical terms, the key to understanding the concept is to appreciate the distinction between a company having price inelasticity (a ...

The price elasticity of demand measures how demand changes in response to changes in price. For example, some products have very inelastic demand, such as certain Lego Star Wars figures.

Elastic Demand Example Discretionary expenses such as consumer electronics often have high demand elasticity. For starters, nobody needs that new 4K TV and can easily justify putting off the ...