8 Go-To Resources About elasticity improves our understanding of supply and demand by adding

elasticity, the ability to stretch and compress without the addition of new elements, is a fundamental part of our ability to understand the relationship between supply and demand.

If you can take a plastic object and stretch it, then it becomes possible to use it to support more objects. Just imagine what it would be like if all the objects in the world were made out of plastic. Now this would be the equivalent of a new product being introduced every day. It would no longer be just used to stretch things, it would now be used to support more things, and it would no longer just exist in one place, it would now exist in many places.

A new way of thinking is helpful when we are not in the moment we are. In that case, we could change our thinking and use the most important things at once.

Imagine you have a stack of plastic pebbles and you pick up one of them.

But what if you have a problem with the stack, and you start picking up different pebbles? You might see that your options are to either find a larger stack or to get rid of the pebbles, and you might have to pick up a new solution for each situation since there are so many. The same is true with elasticity.

Think of elasticity as the ability to adjust our thinking to the new situation. You might not think they’re all the same size. You might think that they’re all the same price. But they’re not. One of them might be higher than the other in price, and you could find another one that’s lower if you really wanted them to be. Imagine you have a stack of plastic pebbles and you pick up one of them.

People are more likely to take us seriously when we use elasticity to solve things like price and size. It’s not just because we’re more likely to think more about things that’ve changed than things that haven’t. For example, imagine you’re a buyer for a restaurant and you suddenly find out that they’re charging $10 for the whole meal.

But if the prices went up, people wouldn’t be so willing to try and price match or price find. If prices went down even though the meal was exactly the same thing, the restaurant might not want to carry the same number of people on its list. In other words, the restaurant would be willing to charge more, in an attempt to make up for the price that they paid for the first time for the meal.

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