elasticity coefficient

The elasticity coefficient measures how sensitive one variable is to changes in another. In economics, for example, it often describes how demand for a product changes in response to price changes. An elasticity coefficient greater than 1 means demand is very responsive to price changes (elastic), while less than 1 means it’s less responsive (inelastic). A coefficient of exactly 1 indicates a proportional response. This concept helps businesses and policymakers understand how changes in pricing or other factors can impact consumer behavior and sales, guiding decision-making and strategy.