Elasticity and Economics

Elasticity is a term taken from the technical sciences. In economics refers to the ability of some economic size to react to change some other size with which the interdependent relationship. The elasticity measures the percentage change in the dependent variable percentages of change caused by the independent variables in a given period of time. How the percentage changes of independent values affect the percentage change in the dependent size? Whether percentage change in the dependent variable higher, lower or equal to the percentage changes in the independent variable? What are the consequences of these changes on the company's business or economics? Answers to these questions are obtained by using the concept of elasticity. The concept involves the application of elasticity, price elasticity of demand, supplied elasticity, elasticity of cost, elasticity production function, the elasticity of the labor force etc. The concept of elasticity is important that companies, especially for defining the pricing policy on consumers to spend or save income for the state to carried out tax policy.