Understanding elasticity can really help businesses set their prices right. But there are some challenges that come with it:

1. Understanding Elasticity:

   • It's often hard for businesses to figure out how sensitive people are to changes in price. This is called price elasticity of demand (PED) and price elasticity of supply (PES).
   • Changes in what people like and outside factors can also make elasticity change.

2. Different Markets:

   • Different products and services have different levels of elasticity, which makes pricing tricky.
   • For example, everyday needs, like food, usually have inelastic demand, meaning people will buy them regardless of price changes. On the other hand, luxury items, like fancy gadgets, are more elastic; people may hold back if the prices go up.

3. Getting Data:

   • It can be tough to find good and reliable information on how customers behave. Without this data, businesses might get their price calculations wrong.

To make things better, businesses can spend time and money on market research. They can also use tools that analyze data to get a clearer picture of how sensitive customers are to price changes. This way, they can make smarter decisions about pricing.