The Pulse of Price Elasticity | Vibepedia
Price elasticity, a concept coined by Alfred Marshall in 1890, measures how responsive the quantity demanded of a good is to a change in its price. With a…
Overview
Price elasticity, a concept coined by Alfred Marshall in 1890, measures how responsive the quantity demanded of a good is to a change in its price. With a Vibe score of 80, indicating significant cultural energy, price elasticity is a crucial factor in understanding market dynamics. The concept is widely debated among economists, with some arguing that it's a key indicator of market power, while others see it as a simplistic measure that neglects external factors. According to a study by the National Bureau of Economic Research, the price elasticity of demand for gasoline is around -0.4, meaning that a 10% increase in price leads to a 4% decrease in demand. As the global economy continues to evolve, understanding price elasticity will be essential for businesses and policymakers alike. With influence flows tracing back to the works of Adam Smith and David Ricardo, price elasticity remains a vital concept in modern economics, with a controversy spectrum rating of 6 out of 10, reflecting ongoing discussions about its applications and limitations.
Key Facts
- Year
- 1890
- Origin
- Alfred Marshall's Principles of Economics
- Category
- Economics
- Type
- Economic Concept