I learned that if a product has a price flexibility greater than 1 in the market
ID: 1247642 • Letter: I
Question
I learned that if a product has a price flexibility greater than 1 in the market, then these 2 things will always happen:* if the price of the product goes up by 10 percent, the demand for it will go down by more than 10 percent
* if the price of the product goes down by 10 percent, the demand for it will rise by more than 10 percent.
It seems strange to me that this will always be the case. Logically I don't see why both of these will always occur. Surely there must be products where the first sentence is true, and the second isn't. Yet the concept of "price flexibility" does not allow for that possibility. Would someone please explain this to me?
Explanation / Answer
I find of understand what you are saying but I do not understand this, "I learned that if a product has a price flexibility greater than 1 in the market." I am not really sure what you mean by greater than 1 in the market.