Okuzeka
Marketing vocabulary · Pricing

Price elasticity

Meaning in marketing, with examples

nounAdvanced term

In marketing, price elasticity means: How much the demand for a product changes when its price changes; if a small price rise causes a big drop in sales, demand is called elastic.

In Turkish: fiyat esnekliği, talebin fiyat esnekliği

How it is used

An economics term used in pricing decisions. It is calculated as the percentage change in quantity demanded divided by the percentage change in price. Products with few substitutes, such as basic medicines, tend to have inelastic demand.

Example sentences

  1. Price elasticity in this category is high: when we raised prices by 5%, volume fell by 12%.

  2. Before the price increase, finance wants a study on the price elasticity of our top ten products.

Common collocations

  • price elasticity of demand
  • high price elasticity
  • measure price elasticity
  • price-sensitive customers
  • pricing strategyThe method a company uses to set and change its prices, based on its costs, its competitors, the value customers see and its business goals.
  • price pointA particular price at which a product is offered, often chosen to match what a certain group of customers expects or can afford.
  • discountA reduction in the usual price of a product or service, often offered for a limited time or only to certain customers.
  • penetration pricingLaunching a product at a low price to attract many customers quickly and win market share, often with a plan to raise the price later.

More terms: Pricing

Practise with graded reading

Reading at the right level is the fastest way to make new words stick. Pick free English books by level: