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LIMITED LIABILITY: A condition in which owners are not personally held responsible for the debts of by a firm. Corporations are the main form of business in which owners have limited liability. The primary benefit of limited liability is that it makes it possible for a business to accumulate large amounts of productive resources that lets it take advantage of large scale production.
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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 18, 2025].
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Today, you are likely to spend a great deal of time searching the newspaper want ads trying to buy either a T-shirt commemorating the 2000 Olympics or a genuine fake plastic Tiffany lamp. Be on the lookout for telephone calls from former employers.
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Natural gas has no odor. The smell is added artificially so that leaks can be detected.
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"A winner is someone who recognizes his God-given talents, works his tail off to develop them into skills, and uses those skills to accomplish his goals. " -- Larry Bird, basketball player
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LAD
Least Absolute Deviations
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