Can You Elaborate The Role Of Demand Elasticity In The Price Of Product?

The demand for a product is said to be elastic if it is highly dependent on price like the luxury goods. If there is an increase in price, their demand will go down as now people will not be willing to pay the higher amount and the change in quantity demanded is higher then the price change. The demand for a good is said to be inelastic if the change/ increase in price does not result in a corresponding decrease in the demand. This is true for goods that are considered a necessity. It means that if the elasticity of demand of your product is low as people are indifferent to a price change and will buy the product any way, then you can price your product at a higher level. If the elasticity is high then you can not increase the price but if you decrease it there will be a considerable increase in quantity demanded.