As perfectly defined by N. Gregory, elasticity is measured by how much buyers and sellers responds to the changes in market conditions.
If we think of a situation, when the price of rice, wheat or pulses goes up. It's unlikely that the the demand of people especially in India who are habituated to a specific roti '' indian bread'' and rice in their meal. Hence these crops are inelastic. Though a slight decrease in demand doesn't effect the consumer's basic needs for the same. However, the rise in prices of a particular veggie will definitely see a drop in demand on basis of availability of substitute and moving towards elasticity or price elastic zone.
Price and income are codependent on each other, as the income of a person determines his ability to buy or increase his demand from basics to luxurious needs as per Maslow's theory.
Market researchers have always focused to increase revenue on elastic demands involving-
- Lowering prices to increase quantity purchases.
-Attracting customers via advertisements and endorsements.
-increasing price on certain product, which increases revenue by good effective margins.
As per my perception, income rise is proportional to rise in demand and vice versa.
Also this study can be effective in forecasting and setting up the product in the market based on their(people's) economic statures.
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