Price Elasticity Intuition
Price elasticity of demand measures how much the quantity of a good people buy responds to a change in its price: demand is elastic when quantity changes by a larger percentage than price did, and inelastic when quantity changes by a smaller percentage. Necessities with few substitutes, like prescription medication, tend to have inelastic demand, since people keep buying them even as price rises, while goods with many close substitutes, like a specific brand of soda, tend to have more elastic demand, since buyers can more easily switch to an alternative instead.
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