Elasticitateapre

Elasticitateapre is a term used in economics to denote the responsiveness of the quantity of a good or service demanded or supplied to changes in its price. More commonly known as price elasticity, elasticitateapre appears as a compound form in some Romanian-language texts, referring to the same core idea: how much quantity responds when price moves.

Two central variants are price elasticity of demand (PED) and price elasticity of supply (PES). PED measures the percentage change in quantity demanded resulting from a one percent change in price, while PES measures the percentage change in quantity supplied for a one percent price change. In practice, PED is usually negative because demand falls as price rises, but analysts report its absolute value. PES is typically positive since higher prices incentivize greater supply.

Interpretation follows standard thresholds: elasticity greater than one in absolute value indicates elastic responses, less than one indicates inelastic responses, and exactly one indicates unit elasticity. Several factors influence elasticity, including the availability of substitutes, the share of income spent on the good, whether the good is a necessity or luxury, and the time horizon over which decisions are analyzed.

Measurement considerations include choosing between arc elasticity and point elasticity, data quality, and the choice of base values. Elasticity concepts inform pricing strategies, tax incidence analyses, and policy evaluations of how price changes affect total revenue and welfare. Limitations include regional or temporal variation in elasticity and the ceteris paribus assumption often required for estimation.