Price elasticity measures how demand changes with price; it gauges a firm's pricing power. Investors should examine firms' price elasticity to decide if a product has sustainable profit potential.

9. Since a decrease in the price of one unit along a linear demand curve will result in an increase in the quantity demanded by a constant amount, the price elasticity is constant for all quantities ...

Which factors determine the elasticity of demand of ... This means as the price of a good goes up, demand for it drops, all else being equal. This principle, along with the law of supply, forms ...