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Answer:
Price elasticity of demand is a term that is used to describe the relationship between price and demand, and how changes in one will affect the other. Consumer demand for all products will respond differently to price changes, and this is true for all products. As a result, understanding those distinctions is critical when making critical pricing decisions.
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The variations in demand for a product with respect to its corresponding price can be described by the price elasticity of demand. It is of great importance to the managers in this concept that demand and price behave differently.
What are market factors?
Market factors are the factors that affect an economy of a country. They can be the fluctuations in the demand and supply of a product.
Price elasticity of demand is the economics concept that depicts the behavior of demand with respect to its price. As the demand and price respond differently, means, that if the price of a product increases, then the demand goes to fall down whereas if the price of a product falls down, then the demand increases. This variation has to be analyzed by the managers before making any pricing strategy.
Therefore, studying the concept of price elasticity of demand by managers is of essential importance.
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