The idea of "Price Elasticity" often gets lost in translation from Economic-speak to normal conversations, which is really unfortunate because it is a powerful concept for agribusiness managers. It matters most when we think in terms of total revenue and how price changes might affect the bottom line.
A simple example would be a farm family that has a side business of selling farm-fresh, certified organic local eggs to customers in town (assume one member of the family has a "town job" that puts him/her in contact with lots of folks so there's easy access to potential customers).
What happens to total revenues if this farm family decides to raise the price of a dozen eggs from $4.00 to $5.00? Will total revenues go up or down? Typically, a price increase means fewer units sold, but more per unit revenue for each unit sold. So, which effect will dominate the overall outcome on total revenue? Will selling fewer flats of eggs (with 12 eggs per flat) mean less revenue? Or will selling at a higher price mean more revenue? And more importantly, what factors will determine this outcome (that is, what makes customers more or less sensitive to price changes?