PRICE ELASTICITY OF DEMAND AS A DETERMINANT OF CORPORATE MARKET BEHAVIOR AND AN INDICATOR OF THE TRANSFORMATION OF VITAL SOCIAL NEEDS

Анотація

Introduction. Under conditions of macroeconomic instability, further exacerbated by russia’s full-scale aggression against Ukraine, enterprises are forced to review their pricing strategies, and the state must revise its consumer protection mechanisms. At the same time, the scientific literature lacks a comprehensive approach that combines a microeconomic analysis of elasticity with an assessment of its social consequences. The aim of the article is to study the price elasticity of demand as a determinant of an enterprise's market behavior and as an indicator of the transformation of society's essential needs into effective demand. Materials and methods. The study employed methods of theoretical generalization, comparative and structural analysis, as well as statistical analysis of data from the State Statistics Service of Ukraine for 2019–2025. Conceptual modeling was applied to examine the relationship between price elasticity, corporate market behavior, and the socio-economic consequences of pricing decisions. Results and discussion. It was established that the price elasticity of demand coefficient (Ed) is a decisive factor in choosing a corporate pricing strategy. A matrix of six pricing strategies was developed and substantiated depending on the value of the price elasticity coefficient. It is proven that under the severe wartime inflation of 2022, the scale effect of inelastic demand became fully evident; its statistical confirmation is the critical decrease in the physical volume index of retail trade turnover to 67.8% against the background of a simultaneous increase in the share of non-alternative food expenditures to 45.1%. It was found that such a forced redistribution of household budgets critically depletes the financial resources of the population, leaving no funds for goods of higher elasticity, which leads to the stagnation of adjacent markets. The scientific novelty of the study lies in justifying low price elasticity as a quantitative indicator of essential needs, allowing this market metric to be used as a tool for identifying social vulnerability. Conclusions. The study confirmed that under conditions of deep macroeconomic instability, the price elasticity of demand transforms from a purely commercial metric into an indicator of social security. The practical results of the study can be used by enterprises when forming pricing strategies, and by government authorities when developing regulatory measures to protect consumers. The proposed approach allows the state to assess the consequences of market shocks not only through nominal price growth indicators but also through the degradation level of effective demand and the ability to meet the essential needs of society.

Класифікація

Ідентифікатори

Схожі роботи