kysyntätaipumille

Kysyntätaipumille, known in English as price elasticity of demand, is an economic concept that measures the responsiveness of the quantity demanded of a good or service to a change in its price. It is calculated as the percentage change in quantity demanded divided by the percentage change in price.

When the price elasticity of demand is high, a small change in price leads to a relatively large change in the quantity demanded. This indicates that demand is elastic. Goods with many substitutes, luxuries, or items that represent a large portion of a consumer's budget tend to have elastic demand.

Conversely, when the price elasticity of demand is low, a change in price has a relatively small effect on the quantity demanded. This signifies that demand is inelastic. Necessities, goods with few substitutes, or items that constitute a small portion of a consumer's budget often exhibit inelastic demand.

Understanding price elasticity of demand is crucial for businesses when setting prices, as it helps predict how changes in price will affect their total revenue. For policymakers, it is important for analyzing the impact of taxes and subsidies on consumer behavior and market outcomes. The concept is a fundamental tool in microeconomics for analyzing market dynamics.