Price elasticities

Price elasticities

The percentage change in quantity divided by a percentage change in the price. Answers the question: How much will the demand for my product decrease if I raise prices by 10%?
Copyright © 2012, Campbell R. Harvey. All Rights Reserved.

Elasticity of Demand

The relative stability of a security's or product's price in the face of increased or decreased demand. Elastic securities or products have prices that move as independently as possible from changes in demand. In securities, elasticity is strongly influenced by the number of shares outstanding; if a company has many shares outstanding, a large order to buy or sell them is less likely to affect the price as strongly as a similar order for a company with comparatively few shares outstanding. In other products, elasticity largely comes from whether a given product is considered a necessity or a luxury. A "necessary" product is likely to be more elastic. See also: Income Elasticity of Demand.
Farlex Financial Dictionary. © 2012 Farlex, Inc. All Rights Reserved
References in periodicals archive ?
This is conceptually different from the price elasticities reported in this paper and should be interpreted as the effect of a change in each person's previous year plan premium on the sum of the joint probabilities of all possible combinations of previous and current year plans that involve a switch.
For the estimation of average income and price elasticities and average consumer welfare loss, a representative in each income quartile in 1992 is constructed using means of all relevant variables.
From the computed share elasticities it is possible to obtain the familiar quantity elasticities, as a simple relationship exists between them.(23) While all the price elasticities we present in Part A of Table 4 are the familiar quantity elasticities, the household size and total expenditure elasticities are share elasticities.
We find negative energy cross-price elasticities around -0.2 and water price elasticities in the order of -0.1 or smaller.
This potential results brom the different price elasticities of demand across physician services.
First, our basic interest is in estimating disaggregate price elasticities of demand, which are unit-independent parameters that indicate the responsiveness of demand to changes in relevant prices.
If the prices of other goods or lottery games are considered in the empirical-demand function, then the sum of all price elasticities (own price and cross prices) is restricted to be equal to -1.
(7) The gasoline price elasticities in these estimates are -0.5 and -0.4.
With regard to cross price elasticities, Pindyck and Rubinfeld (2005, p.
Hicks own and cross price elasticities of demand for input i with respect to its market price turns out