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%?

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.
References in periodicals archive ?
Brooks (2007) and Ottoni-Wilhelm and Hungerman (2007) examine both total giving and giving by purpose in the United States, focusing on estimates of tax price elasticities and their implications for income tax policy.
seems to be suffering from an extreme variant of the Houthakker-Magee effect -- named after two economists who discovered in 1969 that price elasticities for imports and exports could diverge substantially, giving rise to a permanent tendency toward current-account imbalance.
The short-term income and price elasticities become smaller than the long-term elasticities.
Price Elasticities of Natural Gas Demand in France and West Germany.
Some of the empirically observed price elasticities approach k/(k-1) in the long run.
Firms that understand the strength of their brand franchises and associated price elasticities, however, can benefit considerably.
First, we calculate point estimates of elasticity values using several combinations of two key travel cost parameters, reporting the results for cost elasticities (Panel A) and price elasticities (Panel B) in Table 4.
ij]=0 for i[not equal to]j) However, using Slutsky equation, the compensation or Hicksian demand price elasticities is derived as follows:
Consequently, using cost-sharing elasticities as a proxy for gross price elasticities would be unwise, if not misleading.
Key parameters in these analyses are the price elasticities of supply and demand -- the responsiveness of quantities supplied or demanded to a given change in prices.
Here, knowing the price elasticities for each of the individual member segments is an essential piece of information needed to understand how members will truly react to rate changes.
Hence, using time series data from 1979 to 2006, we estimated ARDL model to investigate income and price elasticities of electricity demand.