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.