Analyzing the Real-World Application of the Elasticity Theory of Demand and Supply and its Impact on Pricing Strategies, Consumer Behavior, and Policy Decisions

The elasticity theory of demand and supply is a fundamental economic concept that explains how price changes affect the quantity demanded and supplied of a product or service. This paper explores the real-world application of the elasticity theory of demand and supply. Specifically, it examines how different market factors affect the elasticity of demand and supply and how firms and policymakers can use elasticity theory to optimize pricing strategies, increase revenue, and achieve policy objectives. The literature review draws on various secondary sources, including academic journals, business reports, and industry publications. It analyzes the real-world application of the demand and supply elasticity theory across various industries and contexts. The literature review reveals that the elasticity theory of demand and supply is widely applied across various industries, such as healthcare, retail, and transportation. It is utilized by businesses and policymakers to optimize pricing strategies, increase revenue, and achieve policy objectives. Studies analyzing the behaviour of consumers and businesses in response to changes in price through surveys and secondary data analysis emphasize the importance of understanding demand and supply elasticity in making informed business decisions regarding pricing strategies, consumer behaviour, and government policies