Definition
A price elasticity is a measure of the responsiveness to a change in price in terms of quantity demanded. A low elasticity means that demand changes don't vary much when prices do.
In the room
How the word shows up in a real conversation.
Two cofounders disagree until they define Price elasticity. Once they agree it means “Measure of how sensitive demand is to changes in price”, the argument becomes a decision.
Common mistake
Using Price elasticity as a label instead of a fact. If you cannot point to the evidence — a number, a customer, or a written assumption — you are using the word as jargon.
See also
Price floor
Minimum price that can be charged for a product or service.
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Price point
Specific price at which a product or service is offered to customers.
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Price skimming
Pricing strategy that starts with high prices and gradually lowers them.
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Price war
Competitive situation where companies repeatedly lower prices to gain market share.
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