Asked in Definitions

What does elasticity mean?


Wiki User

Elasticity means strecthy:)

Actually, Elasticity is an economic term that measures how much a product is used less if the price increases. The classic example is gasoline; we all use it to power our cars, and we certainly rely on our cars to get to work, school, etc. If the price of gasoline goes up 10 percent, the usage of gasoline goes down 1 percent. The elasticity of gasoline is -.1. Negative means the usage goes down. Many luxury items on the other hand, have higher elasticities because when prices go up a little bit, the usage goes down a lot.

Tim K.