

Price elasticity measures how sensitive the demand for a product or service is to changes in its price, indicating whether customers are likely to buy more or less when prices increase or decrease.
Price elasticity helps businesses understand customer behaviour in response to pricing changes.
This interpretation guides pricing and revenue decisions.
Understanding price elasticity is essential for setting effective pricing strategies. In competitive markets like India, it helps businesses predict how discounts, price hikes, or promotional offers will affect sales volumes and revenue. It also supports decisions around product positioning, market entry, and long-term profitability by balancing customer demand with margin objectives.