The Key Difference Between Elasticity and Inelasticity

Elasticity vs Inelasticity
Feature	Elasticity	Inelasticity
Definition	Measure of how much the quantity demanded or supplied responds to a change in price or other factors.	Situation where quantity demanded or supplied changes little despite changes in price or other factors.
Price Sensitivity	High sensitivity; small price changes cause significant quantity changes.	Low sensitivity; quantity changes little even with large price changes.
Elasticity Value	Greater than 1 (\|Elasticity\| > 1).	Less than 1 (\|Elasticity\| < 1).
Examples	Luxury goods, non-essential items, and goods with many substitutes.	Essential goods, addictive products, and goods with few substitutes.
Revenue Impact	Price increase leads to revenue decrease; price decrease leads to revenue increase.	Price increase leads to revenue increase; price decrease leads to revenue decrease.
Time Factor	Usually more elastic over the long term as consumers find alternatives.	Usually more inelastic in the short term due to necessity.
Examples of Elasticity Types	Price elasticity of demand, income elasticity, cross elasticity.	Also applies to price, income, and cross elasticity but values remain low.
Importance in Pricing	Helps businesses decide optimal pricing to maximize revenue.	Helps understand products with stable demand despite price changes.