Elasticity of a function is a mathematical concept that is widely used in economics. In particular, price elasticity of demand or supply. But generally elasticity in economic is the measurement of how an economic variable responds to a change in another.

Yet I found the term ambiguous and I don't understand why we didn't choose "sensitivity" or "reactivity" instead. To make matter worst, economists often call "Price elasticity of the demand" only, "Elasticity of the demand".

What is the history of the term "elasticity"? Why do we use this term?

  • $\begingroup$ Maybe it is linked to Elasticity (physics)... $\endgroup$ – Mauro ALLEGRANZA Jan 17 '19 at 20:46
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    $\begingroup$ Welcome to HSM. Concepts like "sensitivity" and "reactivity" do not capture the economic/statistical notion of regression toward the mean, while elasticity does capture this notion. Elastic means the ability to resume its normal shape after distortion, contraction, or dilatation. $\endgroup$ – Nick Jan 17 '19 at 20:46

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