Not sure I understand this comment that well tbh but Ill take a shot here.
Im no economist but it seems like “price elasticity” is more of a tool used by economists to measure specific price versus demand.
Definition I found online was “a measure that helps economists and businesses understand how sensitive the quantity demanded of a good or service is to changes in its price.”.
Why is it incorrect to think that as people are paid more, demand will increase for products unless prices of products rise with it?
Part of price elasticity is the fact that certain categories of goods absorb increases in cost more than others. Another part of that is supply and demand. Some products have a lot of”wiggle room” and some are extremely tied to demand.
Because of that some products will absorb the cost as that still creates the most profit. Other products will pass on the extra cost as they can without affecting profit.
If a not a subject you can read a quick blog post on to really pick up, it’s a huge part of most economic courses.
Look up price elasticity. This isnt how it works
Not sure I understand this comment that well tbh but Ill take a shot here.
Im no economist but it seems like “price elasticity” is more of a tool used by economists to measure specific price versus demand.
Definition I found online was “a measure that helps economists and businesses understand how sensitive the quantity demanded of a good or service is to changes in its price.”.
Why is it incorrect to think that as people are paid more, demand will increase for products unless prices of products rise with it?
Part of price elasticity is the fact that certain categories of goods absorb increases in cost more than others. Another part of that is supply and demand. Some products have a lot of”wiggle room” and some are extremely tied to demand.
Because of that some products will absorb the cost as that still creates the most profit. Other products will pass on the extra cost as they can without affecting profit.
If a not a subject you can read a quick blog post on to really pick up, it’s a huge part of most economic courses.