Hi, I’m very confused between elasticity and inelasticity ? How do I know , at this point my product purchase probability is increase or decrease with reference to price elasticity? I can’t get it. Can you explain this in detail please.
when we have |elasticity| <1, the purchase probability is considered inelastic. Here, we’re able to increase the price of our product, without significant a big drop in purchase probability.
For elasticity values >1, we have elasticity. Here we should think about decreasing the price of the product to ensure we have high enough purchase probability.
You can check out this video, as well, where the connection between purchase probability and price elasticity is explained: