Economists use elasticity of demand to gauge how responsive consumers are to changes in price and income, but investors can also use elasticity of demand to help make more informed investing ...

An elastic demand curve means that a change in price has a large effect on buying, while an inelastic demand curve means that a price change has less effect on buying.

Learn how income elasticity affects demand with our guide on definitions, formulas, and types, helping you understand ...

Economists use elasticity of demand to gauge how responsive consumers are to changes in price and income, but investors can also use elasticity of demand to help make more informed investing ...

Inelastic demand exists when customers buy roughly the same amount of a good regardless of most factors, while elastic demand means that demand increases or decreases significantly depending on ...

An elasticity of between zero and one is said to be relatively inelastic, when large changes in price cause small changes in demand.

Elastic Demand vs. Inelastic Demand While elastic demand is demand that changes drastically when the price changes, inelastic demand is what happens when demand suffers little to no change.

Demand for toothpicks tends to be inelastic because they are cheap and bought infrequently, while that for meat is more elastic. The fraction-of-total-cost issue comes up in restaurant meals.

Explore how price elasticity of demand helps investors answer critical questions about the stocks they may want to invest in.