Yksikköjoustavuus

Yksikköjoustavuus, known in English as unit elasticity, is an economic concept describing a situation where a change in price leads to an exactly proportional change in quantity demanded or supplied. This means that the elasticity of demand or supply is precisely equal to one.

When demand has unit elasticity, any increase in price causes a decrease in quantity demanded of the same percentage. For example, if the price of a good increases by 10%, the quantity demanded will decrease by exactly 10%. This results in total revenue remaining constant regardless of price changes. Businesses selling goods with unit elasticity will not see their total revenue change whether they raise or lower prices.

Similarly, supply can exhibit unit elasticity. If the price of a good increases by a certain percentage, the quantity supplied will increase by the exact same percentage. This implies that producers are willing and able to adjust their output proportionally to price fluctuations.

The concept of unit elasticity is a theoretical point on the spectrum of price elasticity. In reality, few goods or services perfectly exhibit unit elasticity across all price ranges. Most goods fall into categories of elastic (elasticity greater than 1) or inelastic (elasticity less than 1) demand or supply. However, understanding unit elasticity is crucial for economic analysis and for modeling consumer and producer behavior. It helps economists understand the relationship between price, quantity, and revenue in various market scenarios.