Price Elasticity

Etymology

The concept of elasticity of demand was introduced by economist Alfred Marshall in his “Principles of Economics” (1890), borrowing the physics idea of stretch. “Elastic” comes from Greek “elastikos,” propulsive, from “elaunein,” to drive or beat out.

noun phrase · /PRYS ee-la-STIS-ih-tee/
A measure of how much the quantity people buy changes when the price changes.
What it names
A precise handle for the crucial question behind any pricing decision — will a price hike drive customers away, or will they barely notice? — separating necessities from luxuries and habits from whims.
Example
Insulin has very low price elasticity — patients must buy it almost regardless of cost.
Related idea
A Veblen good is the striking exception to the usual rule: for a status luxury, raising the price can raise demand, flipping the normal elasticity relationship on its head.