Supply and Demand

Image result for supply and demand

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.

Image result for Rubber bands for braces

 

5 thoughts on “Supply and Demand

    • Fandango October 7, 2017 / 2:12 pm

      I never called it a law, I referred to it as “an important concept.”

      Liked by 1 person

  1. Michael October 7, 2017 / 5:10 pm

    I guess there has to be in this world folk who I’m sure embrace economics with a passion. I was not one of them, rather when I was in high school I opted out of the class in senior school as it was boring me to tears….it was much later in life that I gathered an understanding of it. Though I do get that it is important in understanding how the world works.

    Liked by 1 person

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