The price elasticity of demand measures how demand changes in response to changes in price. For example, some products have very inelastic demand, such as certain Lego Star Wars figures.

Why it matters Why price elasticity of demand matters. In practical terms, the key to understanding the concept is to appreciate the distinction between a company having price inelasticity (a ...

He cited goods with inelastic demand. One is gasoline, he said. “You commute, you drive, you take your kids to school and your demand for that is inelastic to the price,” he said.