elasticity of supply and demand


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elasticity of supply and demand

(ECONOMICS) the degree of change in supply of a good or service in response to a change in the price offered by consumers (elasticity/inelasticity of supply); or degree of change in the quantity of goods and services demanded in response to a change in prices (elasticity/inelasticity of demand or demand elasticity). For example, the change in demand as a result of a price reduction may be small if the food is already in reasonable supply (inelasticity); and, where a fall in price reflects an overall increase in supply in a competitive market, this may also result in an overall reduction in the income of the suppliers.
Collins Dictionary of Sociology, 3rd ed. © HarperCollins Publishers 2000
References in periodicals archive ?
The size of this energy-price driven rebound will depend on the elasticity of supply and demand. (28) Very inelastic demand or very elastic supply will result in almost no energy price effect rebound, while more elastic demand or inelastic supply will result in much larger rebound.
Specifically, using the estimated elasticity of supply and demand, that is, 0.20and -0.24 respectively and applying obtained relations in the theoretical bases section, welfare effects were computed.