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VERTICAL MERGER: The consolidation under a single ownership of two separately-owned businesses that have an input-output relationship, in which the output of one firm is the input of another. An example of a vertical merger would be a soft drink company merging with a sugar company to form a single firm. A vertical merger should be contrasted with horizontal merger--two competing firms in the same industry that sell the same products; and conglomerate merger--two firms in totally, completely separate industries.
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                           ELASTIC: The general relation between two variables in which relatively small changes in one variable (A) cause relatively large changes in another variable (B). Small changes in variable A cause relatively large changes in variable B or the percentage change in variable B is larger than the percentage change in variable A. This characterization of elasticity is most important for the price elasticity of demand and the price elasticity of supply. Elastic is one of two general elasticity relations between two variables. The other is inelastic. An elastic relation between two variables is a very responsive, or stretchable, relation. The elastic relation is most often directed toward demand and supply in terms of the price elasticity of demand and the price elasticity of supply. In this context, demand or supply is said to be elastic if the percentage change in quantity is larger than the percentage change in price. This means that buyers or sellers are responsive to price changes.However, other relations can also be thought of as elastic. For example, demand might be elastic relative to income. In this case, relatively small changes in income can trigger relatively large changes in demand. Demand and SupplyConsider the two sides of the market.- Demand: Elastic demand exists if relatively small changes in price cause relatively large changes in quantity demanded. Elastic demand means that changes in the quantity demanded are relatively responsive to changes in the price. An elastic demand has a coefficient of elasticity greater than one (with the negative value ignored).
- Supply: Elastic supply exists if relatively small changes in price cause relatively large changes in quantity supplied. Elastic supply means that changes in the quantity supplied are relatively responsive to changes in the price. An elastic supply also has a coefficient of elasticity greater than one.
Perfect and RelativeAn elastic relation can fall into one of two categories--perfectly elastic and relatively elastic.- Perfectly Elastic: Perfectly elastic means an infinitesimally small change in price results in an infinitely large change in quantity demanded or supplied. This elasticity alternative exists when the price is fixed, that is, an infinite range of quantities is associated with the same price. This is the extreme, limiting case of elastic. Perfectly elastic demand can occur, in theory, when buyers have the choice among a large number of perfect substitutes-in-consumption. In an analogous way, perfectly elastic supply can occur when producers have the ability to switch resources among a large number of perfect substitutes-in-production.
- Relatively Elastic: Relatively elastic means that relatively small changes in price cause relatively larger changes in quantity. Quantity is very responsive to price, but not infinitely so. The percentage change in quantity is greater than the percentage change in price. Relatively elastic demand occurs when buyers have the choice among a large number of close but not perfect substitutes-in-consumption. In an analogous way, relatively elastic supply occurs when producers have the ability to switch resources among a large number of close but not perfect substitutes-in-production.
Recommended Citation:ELASTIC, AmosWEB Encyclonomic WEB*pedia, http://www.AmosWEB.com, AmosWEB LLC, 2000-2025. [Accessed: July 14, 2025].
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Today, you are likely to spend a great deal of time browsing through a long list of dot com websites trying to buy either clothing for your pet iguana or a set of hubcaps. Be on the lookout for empty parking spaces that appear to be near the entrance to a store.
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Woodrow Wilson's portrait adorned the $100,000 bill that was removed from circulation in 1929. Woodrow Wilson was removed from circulation in 1924.
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"Concentrate all your thoughts upon the work at hand. The sun's rays do not burn until brought to a focus." -- Alexander Graham Bell, inventor
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LIBOR
london Inter-Bank Offered Rate
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