Elastic Demand

Elastic demand is a term used in economics to describe the responsiveness of the quantity of a good or service that is demanded by consumers to changes in its price. When the price of a good or service increases, the quantity demanded decreases, and vice versa. Elastic demand is a measure of how much the quantity demanded changes in response to a change in price. If the quantity demanded changes significantly in response to a change in price, then the demand is said to be elastic. If the quantity demanded does not change significantly in response to a change in price, then the demand is said to be inelastic.

History of Elastic Demand

The concept of elastic demand was first introduced by Alfred Marshall in his book Principles of Economics in 1890. Marshall argued that the demand for a good or service is elastic when the price of the good or service is high relative to the income of the consumer. He also argued that the demand for a good or service is inelastic when the price of the good or service is low relative to the income of the consumer. Since then, the concept of elastic demand has been widely used in economics to analyze the behavior of consumers in response to changes in price.

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Summary

Elastic demand is a term used in economics to describe the responsiveness of the quantity of a good or service that is demanded by consumers to changes in its price. When the price of a good or service increases, the quantity demanded decreases, and vice versa. The concept of elastic demand was first introduced by Alfred Marshall in his book Principles of Economics in 1890. For more information about elastic demand, you can visit websites such as Investopedia, The Balance, and Khan Academy.

See Also

• Inelastic Demand
• Price Elasticity of Demand
• Cross Elasticity of Demand
• Income Elasticity of Demand
• Substitution Effect
• Supply and Demand
• Marginal Revenue
• Marginal Cost
• Price Floor
• Price Ceiling

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