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The term “price elasticity” describes the relationship between demand and the cost of a product or service.
One may say that the demand for a certain good or service is price inelastic if the degree to which the demand changes in response to changes in the price does not change significantly.
Example: milk, fuel, rice.
On the other side, we may say that the demand for an item is very price elastic if it responds dramatically to even a relatively little change in price by shifting in a significant direction.
Example: luxury clothing, automobiles, smartphone.
