Today’s one-word prompt is “elastic,” which made me recall my days as an undergraduate in college. I majored in economics and marketing. An important concept we were taught was this thing called “elasticity.”
In business and economics, elasticity refers the degree to which individuals, consumers, or producers change their demand or the amount supplied in response to price or income changes.
Elasticity measures the responsiveness of the quantity supplied to a change in price. If demand for a product is elastic, demand will increase as the price is reduced. That means that the supplier will earn more revenue due to increased demand than it loses from a lower price per unit.
Using elasticity, a firm can know how quickly, and effectively, it can respond to changing market conditions, especially to price changes.
I was also reminded of the small elastic bands my orthodontist put on my braces when I was in junior high school.