Blue Flower


Elasticity - the relationship between the percentage change in price to the percentage change in quantity. If a small change in the percentage price change leads to a large percentage change in the quantity demanded - it is said to be price elastic. 

This is important information to the seller, because if this is the case it follows that the seller would be able to increase the total income by reducing the price! So it is NOT true that sellers always increase price to increase income.