GSU Economics Elasticity Response of The Market to Price Changes Discussion
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1.You are introduced to the shutdown price, using elasticity to determine the effects of price changes, and cost-based pricing.
Discuss the importance of considering elasticity in pricing decisions and the danger of relying solely on costs.
Then reply to students post below within 2-3 sentences
2. Relying solely on costs, and setting prices too low may be dangerous due to a decrease in business revenue.
The business may make less than what they could have. This is where elasticity comes into play.
Elasticity is the responsiveness of one variable to a change in another.
If quantity demanded changes a lot when price changes a little, the product or goods has an elastic demand. (CSU,2021)
