What is own-price elasticity?
Understand the Problem
The question is asking for a definition or explanation of own-price elasticity, which is a concept in economics that measures how the quantity demanded of a good responds to a change in its own price.
Answer
The percentage change in the quantity demanded of a good or service divided by the percentage change in the price.
The own-price elasticity of demand is the percentage change in the quantity demanded of a good or service divided by the percentage change in the price.
Answer for screen readers
The own-price elasticity of demand is the percentage change in the quantity demanded of a good or service divided by the percentage change in the price.
More Information
Own-price elasticity helps businesses and economists understand how sensitive consumers are to price changes, which is critical for pricing strategies.
Tips
Common mistakes include confusing own-price elasticity with cross-price elasticity or income elasticity. Ensure you're focusing on the price and quantity of the same good or service.
Sources
- Own-Price Elasticity of Demand: Formula, Calculation, Types - Penpoin - penpoin.com
- Own Price Elasticity: Formula & Calculation - Vaia - vaia.com
- Understanding Price Elasticity of Demand: Definition, Formula - Sawtooth Software - sawtoothsoftware.com
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