Yksikkäiselastinen

Yksikkäiselastinen is a Finnish term that translates to "unit elastic" in English. It describes a specific economic concept related to elasticity, particularly price elasticity of demand. When the price elasticity of demand for a good or service is unit elastic, it means that a percentage change in price leads to an equal percentage change in quantity demanded.

For example, if the price of a product increases by 10%, and its quantity demanded decreases by exactly 10%, then the demand for that product is unit elastic. In this scenario, the total revenue received by the seller remains unchanged despite the price fluctuation. This is because the increase in price is perfectly offset by the decrease in quantity sold, leading to a constant total revenue.

The concept of unit elasticity is a point on the demand curve. A demand curve can exhibit different elasticities along its various points. For some goods, demand might be elastic (percentage change in quantity demanded is greater than percentage change in price), inelastic (percentage change in quantity demanded is less than percentage change in price), or unit elastic. Understanding unit elasticity is crucial for businesses when making pricing decisions, as it helps predict the impact of price changes on their overall revenue. It represents a midpoint between elastic and inelastic demand.