Elasticity is a useful summary measure of demand. Price elasticity measures the responsiveness of demand to price changes. A rule of thumb for calculating elasticity. The difference between a shift of the demand curve and a movement along the demand curve. Changes in income and changes in the prices of related goods shift the demand curve.
Price elasticity is related to marginal revenue , and to total revenue.
As price increases, the quantity demanded decreases. As price increases, goods that were not considered close substitutes at lower prices become closer substitutes. As a caloric sweetener, it is a perfect substitute for sugar in soft drinks. In the graph below, the price of sugar is always above the price of HFCS, making the demand for HFCS very inelastic. If the government should ever decide to stop supporting the price of sugar, the price of sugar would fall to the price of HFCS, and the demand for HFCS would become very elastic.