Elasticity in Economics

Paper Summary:

The paper explains that elasticity in economics measures the percentage reaction of a dependent variable to a percentage change in an independent variable. The paper presents an example of a bakery owner and shows the effects of price rises in products that are considered necessities for the customer. The paper then discusses the demand curve and looks at the factors that affect the elasticity of a particular product or service.

From the Paper:

"Elasticity in economics is a powerful and commanding concept, and the concept is often used to measure the response or the sensitivity of one economic variable, against change in another economic variable. The concept of elasticity can be extremely important to economists and theorists, because of the fact that it would help one to comprehend better the impact that an economic action taken would have on the particular given situation, and this in turn would help greatly in the decision making process within any organization. One of the best examples of an economic variable is 'price'."

Sample of Sources Used:

• Das, Satarupa. (2005, Apr) "The Concept of elasticity in economics" Retrieved 14 December, 2007 from http://www.nvcc.edu/home/sdas/elasticity/
• Piana, Valentino. (2004) "Elasticity" Retrieved 14 December, 2007 fromhttp://www.economicswebinstitute.org/glossary/elasticity.htm
• N. A. (n. d). "Economics basics, elasticity" Retrieved 14 December, 2007 fromhttp://www.investopedia.com/university/economics/economics4.asp
• Wessels, Walter J. (2000) "Economics" Barron's Educational Series.
• Png, Ivan; Lehman, Dale. (2007) "Managerial economics" Blackwell Publishing.

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