Adam Hayes, Ph.D., CFA, is a financial writer with 15+ years Wall Street experience as a derivatives trader. Besides his extensive derivative trading expertise, Adam is an expert in economics and ...

Elasticity is a method of measuring the likelihood of one economic factor affecting another, such as when the price of an item affects consumer demand or when supply affects how much something costs.

Price elasticity assesses how the quantity demanded or supplied of a product reacts to variations in its price. It is calculated by taking the percentage change in quantity demanded—or supplied—and ...