What it is
Price elasticity of demand is a measurement of the change in the consumption of a product in relation to a change in its price.
Elasticity can be described as elastic—or very responsive—unit elastic, or inelastic—not very responsive.
How to use
One of the most important marketing metrics, marketeers need to know. Marketeers should consider price elasticity because it can help them determine the optimal price for a product or service, as well as the potential impact of price changes on demand and revenue.
What to consider
Short-term price change (e.g. temporary price promotion) vs. long-term demand shift.
For complete price response evaluation, competitive response and cross price elasticity need to be accounted for.