How does the concept of elasticity influence market dynamics? Elasticity of dema

How does the concept of elasticity influence market dynamics? Elasticity of demand and supply measures the responsiveness of quantity demanded or supplied to changes in price or other factors. Inelastic demand or supply means that changes in price have minimal impact on quantity, while elastic demand or supply implies substantial responsiveness. Why is it crucial for businesses and policymakers to understand elasticity? How does the price elasticity of demand affect a company’s pricing strategy, revenue, and consumer behavior? What factors determine whether a product or service is elastic or inelastic? Additionally, how does elasticity of supply influence production decisions and pricing in different industries? Considering cross-price elasticity, how do related goods’ prices affect each other’s demand? In a rapidly changing economic landscape, understanding and effectively utilizing elasticity concepts are vital for businesses and governments to make informed decisions and adapt to evolving market conditions.