Elasticity Coefficient
Marketing dictionary
Elasticity Coefficient
1. A measure of the responsiveness of the quantity of a product taken in the market to price changes. 2. (technical definition) E is the limit as the change in price tends to zero of a ratio composed of two ratios: the change in quantity/quantity, divided by change in price/price. E is al-ways negative: if the absolute value of E is greater than one, demand is said to be elastic; if exactly equal to one, unitary price elasticity prevails; if less than one, demand is said to be inelastic.
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