Which of the following best describes "elasticity" in economics?

Elasticity in economics specifically refers to the responsiveness of quantity demanded or supplied when there is a change in price. This concept is crucial because it helps economists and policymakers understand how consumers and producers react to price fluctuations. For instance, if the price of a product increases, economists can use the concept of elasticity to predict whether the quantity demanded will decrease significantly, slightly, or remain unchanged.

A product is said to be price elastic if a small change in price leads to a significant change in quantity demanded or supplied. Conversely, it is considered price inelastic if a change in price has little effect on the quantity demanded or supplied. Understanding elasticity is central to making informed decisions about pricing, taxation, and overall market behavior.

The other options address different economic concepts. Market competition may influence pricing strategies but does not directly define elasticity. Consumer preferences pertain to the tastes and choices of individuals but do not inherently describe how quantities react to price. Stability of economic growth relates to the overall performance of economies over time rather than individual goods' responses to price changes.