Elasticity

Elasticity, in economics and physics, refers to the degree to which a demand, supply, or material changes in response to a change in another factor. For economics, this often involves price sensitivity, measuring how much the quantity demanded or supplied of a good or service changes due to a change in its price, the price of a related good, or the consumer's income. In physics, elasticity describes a material's ability to return to its original shape after being stretched, compressed, or otherwise deformed. A material is considered elastic if it can regain its original form after the force is removed. Inelastic materials do not readily return to their original shape. The concept is also metaphorically used to describe adaptability or resilience.

Elasticity meaning with examples

• When the price of gasoline increased, demand became more elastic as consumers switched to more fuel-efficient vehicles, carpooled or reduced driving, demonstrating high price sensitivity. Companies noticed a decline in revenue with an increase in price as demand was significantly affected by the changes in price.
• The company's advertising campaign significantly increased the demand for its new phone, showcasing the advertising elasticity of demand. As demand increases by a percentage higher than the percentage increase in advertising, the elasticity is considered high, as the advertising is very effective.
• The physicist observed the material's high elasticity when it stretched under stress but quickly returned to its original form, proving its elasticity. Rubber bands are a common example.
• Despite the economic downturn, the city demonstrated remarkable social elasticity by adapting quickly, changing practices to suit the need of citizens. The community's capacity to recover from the crisis was a key indicator.