Essay on Elasticity

                                                                        IC-1014

                           ECONOMICS FOR BUSINESS AND ACCOUNTING AND FINANCE

 HAORAN NING

 NINHD1503

                                              Elasticity

      The interaction of force of demand and supply are very important in business parlance. Since the time of market liberalization in most economies, these forces have been given free rein to determine the direction of business operations especially in causing various levels of intersections. These intersections affect the flow of goods and services, the price and the equilibrium point. In fact, healthy business environment encourage the intersections even more, appreciating the important role it plays. Of more importance is the stability of the market environment. A market that has achieved stability is a good one, and the manipulators of the market variables ensure that they are at safe play to ensure smooth operations. Among the determinant of this serene business forces interplay is the factors of elasticity. It directly affects the determinants of demand and supply. Academically, elasticity refers to the degree of receptiveness to change in price by demand or supply. This paper discusses elasticity in the forces of the market, especially in relation to demand caused by price fluctuations.

        Elasticity is also defined as the measure of the susceptibility to change of one economic variable in relation to change by another. For example, at the corporate level, advertising and marketing elasticity is the connection between a change in a firm's promotion budget and the resultant change in total product sales (Mariotti & Glackin, 2015). It is often illustrated using demand and supply graph and curve. The elasticity shows the relationship between price and quality demanded or consumed Elasticity of the curves determines the nature of supply or demand.  If a curve is more flexible or elastic, then the demand is so elastic, such that a small alteration in price will lead to a large change in quantity of the commodity demanded and consumed. If a curve is less elastic, then slight changes in price will not alter the pattern of consumption of the goods in question (Abebres, 2015). In other words, it will take large variations in price to cause a change in patterns and quantity of consumption. Graphically, elasticity can be demonstrated by a form of the demand or supply curve. A more elastic curve is always somewhat horizontal, and a less elastic curve will tilt more vertically and straight, just as the other one. In reference to the curves, words like flat curve will be frequent. It denotes the horizontal line of elasticity. One which is flat is close to the perfect horizontal graph and show more elasticity.