Prisrespons

Prisrespons is a term used to describe how quantities demanded or supplied change when prices change, often referred to in English as price responsiveness or price elasticity. It expresses the sensitivity of consumers or producers to price movements and is a central concept in microeconomics and market analysis.

Prisrespons is commonly measured by elasticity, defined as the percentage change in quantity divided by the percentage change in price. Values greater than one indicate elastic response (large quantity changes), values less than one indicate inelastic response (small quantity changes), and a value of one indicates unitary elasticity. Separate measures apply to demand and supply and to different market segments.

Factors that influence prisrespons include the availability of substitutes, whether a good is a necessity or a luxury, the share of consumer income spent on the good, brand loyalty, and the time horizon (responses are often larger in the long run). Market structure, consumer information, and regulatory constraints also affect responsiveness.

Empirical estimation of prisrespons uses methods such as regression analysis on observational data, randomized price experiments, and natural experiments created by policy or market shocks. Results inform business pricing strategies, tax policy design, subsidy targeting, and regulation. Limitations include the role of non-price factors (preferences, trends), data quality, and differences between short-run and long-run responses.