The degree of responsiveness to which buyers and sellers react to price changes is called elasticity.
Elasticity is an economic concept used to measure changes in the aggregate demand for goods or services with respect to price changes for the goods or services. A product is said to be elastic if the quantity demanded of the product changes disproportionately as the price of the product rises or falls.
Elasticity is an important economic indicator, especially for sellers of goods and services. Because we know how much a buyer will consume a product or service when the price changes. If the product is elastic, the quantity demanded will change as soon as the price changes.
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