It will lose revenue
What is the relation between elastic demand and price change?
An elastic demand responds proportionately to changes in price and is present in products or services that have substitutes.
It implies that if a good's price goes up, less people will want it. The opposite is also true; if the price drops, the demand will increase.
On the other side, elasticity describes the effect of prices on consumer demand for goods, and there are a number of important elements that affect this relationship:
- Need for the good (or product)
- The availability of alternatives or substitutes for those commodities
- Time
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