Price elasticity of demand measures how much the quantity demanded of a good changes when its price changes. It helps businesses understand consumer behavior. For instance, if the price of a candy bar increases, will people buy less? This relationship is crucial for setting prices. Understanding price elasticity is essential for businesses and economists. It shows how sensitive consumers are to price changes. If demand is elastic, small price changes lead to significant changes in the quantity demanded. Conversely, inelastic demand means price changes do not affect the quantity sold. The post What is Price Elasticity of Demand? – The Essential Small Business Guide appeared first on United Capital Source.

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