Elasticity of supply and demand

Elasticity of supply and demand

1) Terms which indicate the extent to which demand will respond to changes in price and/or quality. Demand from commuters is generally inelastic (ie will not change much), but travel demand for pleasure purposes may be more elastic.

There is also cross-elasticity of demand (eg as between car and train or bus, or between modes for distribution purposes). Elasticity of supply affects the extent to which operators can increase output in response to increased demand, thus it is easier for truck operators to do this than it is for shipping lines.

Source: David Lowe. The Dictionary of Transport and Logistics. Kogan Page, 2002. – P.81 (288 p.)