What does elasticity measure in economics?

Elasticity in economics measures how responsive the quantity demanded or supplied of a good or service is to changes in various factors, most commonly price. When considering price elasticity of demand, for instance, it examines how much the quantity demanded of a product will change in response to a change in its price. Similarly, for supply, elasticity indicates how the quantity supplied will change when there is a shift in price.

The concept of elasticity extends beyond just price changes; it can also involve changes in income (income elasticity of demand) or changes in the prices of related goods (cross-price elasticity). Thus, the correct answer encompasses this broad application of elasticity, making it a fundamental concept in analyzing market dynamics and consumer behavior.