Price Elasticity refers to the measure of how the quantity demanded of a product changes in response to a change in its price. In simpler terms, it helps you understand how sensitive your customers are to changes in the price of your products. Understanding price elasticity is crucial for e-commerce owners because it directly impacts your pricing strategy. If a product is highly elastic, a small increase in price could lead to a significant drop in sales, meaning customers are very price-sensitive. On the other hand, if a product is inelastic, you have more flexibility to raise prices without drastically affecting sales volume, as customers may still purchase it even at a higher cost.
