Explain how to apply the economic term "elasticity" to the consumer market.

Elasticity in the consumer market refers to the consumer's responsiveness to the quantity demanded of a good due to change in price of the good. It is known that the quantity demanded of a good is inversely proportional to the price of the good, but how much this demand level change due to change in price of the good is what is measured by the elasticity of demand. Based on this, demand can be either relatively elastic, inelastic, unitary elastic, perfectly inelastic or perfectly elastic in nature. The following defines the types of elasticity:

Elastic: When the demand of a good is relatively elastic then a one percent change in price of the good will change the quantity demanded of the good by more than one percent. Such type of goods are highly responsive to the price change and is often seen in product markets where there is large availability of substitutes. The elasticity in such cases is greater than 1.

Inelastic: When the demand of a good is relatively inelastic, then a one percent change in price can lead to less than one percent change in the quantity demanded of the good. Such type of goods are not very responsive to the price change and is commonly exhibited by necessary or habitual goods such as salt, or toothpaste. The elasticity in such case is less than 1

Unitary elastic: The demand of the good is unitary elastic when the percentage change in price leads to equivalent percentage change in quantity demanded of the good. The elasticity of good in such case is equal to 1.

Perfectly elastic: The demand of the good is perfectly elastic when the quantity demanded varies infinitely at the same price levels. Such type of demand is exhibited under unusual circumstances such as war conditions. The elasticity in such cases is equal to infinity.

Perfectly inelastic: The demand is said to be perfectly inelastic when the quantity demanded does not change at all with respect to the change in price level. Such type of elasticity can be seen in case of life saving drugs, in which case, whatever the level of price is, the quantity demanded remains the same. The elasticity in this case will be equal to zero.