Discuss the meaning and importance of the concept of elasticity in Essay

Discuss the meaning and importance of the concept of piece of cake in microeconomic reasoning - Essay Examplen cooperate economists ascertain whether it would be more profitable to increase or decrease the legal injury of a particular product based on price elasticity of demand. Elasticity inspection and repairs determine if a good is of inferior musical note or normal quality based on price elasticity of demand. An inferior quality product is consumed less if the consumers income increasing while a normal quality product has higher consumption along with rising income of the consumer. Similarly, Elasticity can help decide whether the products are compliments or supplements. The difference between the two is that with complimentary goods the demand for one leads to demand for an otherwise of the same product, while subsidiary goods are those that guide to less demand for another product. Cross price elasticity of demand determines if a product is a compliment or supplement. And lastly, price elasticity of demand can help economists find out whether her a supplier e.g. a farmer, will have the capability to suddenly increase their supply. Farmers and other agricultural goods producers have low price elasticity of supply as it takes them a long measure to increase their supplies because their supplies take a long time to produce. So, in short, elasticity is used when economists want to know how something changes in relation to a change in another.The concept of elasticity is an integral part of the theory of microeconomics. Law of demand tells us that an increase in the price of a product leads to a decrease in its demand. Here, Elasticity can tell us how much demand will decrease for every one per cent increase in price. An elasticity of 1 or higher is elastic. era inelastic refers to products that remain on constant demand no matter what their price