Price Elasticity Of Demand
price elasticity of demand describes how changes in the cost of a product or service affect a company's revenue. for some products, a change in price will dramatically influence how many units the costumer will buy. in other cases, price movements have little effect on demand. therefore, understanding the price elasticity of each offering is crucial to maximizing profit. to calculate elasticity, divide the percentage change in quantity demanded by the percentage change in price. usually, the number will be negative as price decreases, generally ? shoppers ? more of the product. a number between zero and one indicates an inelastic good. in other words, the customer is relatively unaffected by the new price. numbers above one indicate elastic demand where shopping behavior changes significantly. several factors can affect the price elasticity of products. for example, if substitute goods are readily available, the customer will immediately curtail purchases when the price rises. and if the good represents a major part of the buyer's total spending, he or she will be more likely to shop based on price. a new car fits into both of these categories and therefore represents elastic demand. if an auto maker dramatically increases its pricing, the customer is likely to shop different makes or hold off on his or her purchase altogether. by contrast, public transportation consumers have few alternatives. many train or bus riders doen't have a car. so, ? changes to the fare will have relatively little impact on how often they ride. understanding how consumers value a product can be vital for any company. raising prices can be one of the easiest ways to boost profits, but only if consumers are willing to accept the added cost.
- price elasticity of demand・・・需要の価格弾力性→https://ja.wikipedia.org/wiki/%E9%9C%80%E8%A6%81%E3%81%AE%E4%BE%A1%E6%A0%BC%E5%BC%BE%E5%8A%9B%E6%80%A7
- hold off・・・～を買い控える