- noun the ability to change easily in response to a change in circumstances
Cars & Driving
- noun the ability to recover original size and shape when deforming, especially stretching, forces are released
- The ability of a material to return to its initial state after having been deformed by some outside force.
- The capability of a material or body to recover its dimensions, after a stress causing deformation is removed. Also called resilience (2).
- (written as Elasticity)
The responsiveness of a dependent variable (for example, output or demand) to changes in one of the variables determining it (for example, an input, price or income), ceteris paribus. It may be positive or negative. Numerically it is given by:
elasticity = (% change in dependent variable) / (% change in determining variable)
Using real variables in the above yields what is known as the arc-elasticity. The limit of this, as the change in the determining variable becomes smaller and smaller, is the point-elasticity, which is not directly observable and must be inferred statistically.
Commonly encountered elasticities are income-elasticity (the respon siveness of the consumption of a good or service to changes in income); demand-elasticity or own-price-elasticity (the responsiveness of the consumption of a good or service to a change in its price), cross (price) elasticity (the responsiveness of the consumption of a good or service to a change in the price of another good or service), supply-elasticity (the responsiveness of the quantity supplied of a good or ser vice to a change in its price), elasticity of substitution (the responsiveness of the ratio of two inputs to a change in the marginal rate of substitution) and elasticity of expectations (the responsiveness of the expected value to a change in its current value).
Elasticities of demand have been studied even amongst users of illegal drugs (e.g. Van Ours, 1995 and Bretteville-Jensen, 1999).
- noun the sensitivity of an economic variable, e.g. demand, in response to changes in other variables, e.g. price or income
- noun the ability to expand and be compressed and to return to the former shape