Price Elasticity

Price elasticity basically depends on the behavior of the consumers, which are us, the customers.

There are two types of behavior:

1. Elastic
2. Inelastic

Elastic
Elastic customers:

• Customers that does not care about the price of the products.
• They buy whatever they WANT.
• This usually happens when our income increases, we tend to buy unnecessarily items. 

Inelastic
Inelastic customers:

• Customers that do care about the price of the products
• They buy according to their salary, and savings.
• They buy whatever they NEED.
• There is a big difference between buying something we need and want. 
• It happens when:
• Price: UP, Demand: DOWN.
• Price: DOWN, Demand: UP.

* that is considered as the movement of the elasticity *

SHORT SUMMARY:

"When the demands (willing buyers) and the suppliers (willing sellers) are successfully transacted, it will eventually lead to the state of equilibrium, which basically determines the price."