Elasticity measures the responsiveness of changes in one variable to changes in another.
For example, the own price elasticity of demand is computed by dividing the percentage change in quantity demanded by the percentage change in price. If the calculated elasticity is greater than one, demand is elastic. If it is less than one, demand is inelastic. If it were to exactly equal one, demand would be unit elastic.
Total revenue for a product with an elastic demand can be increased by lowering price. For a product with an inelastic demand, total revenue can be increased by raising price. If a product has unit elasticity, price can be raised or lowered with no impact on revenue.
In general, if a product has more substitutes, if it takes a larger percentage of your budget, or if you have more time to decide, the greater will be the elasticity of demand. Empirically, salt (0.1), toothpicks (0.1) and coffee (0.25) have very inelastic demands, and price could be increased to benefit revenue. Fresh green peas (2.8), Chevrolet automobiles (4.0) and fresh tomatoes (4.6) have very elastic demands, and price should be lowered to increase revenues.
How sales respond to changes in price determines the best strategy, which determines the outcome. Revenues grow if proper strategies are implemented. Revenues shrink if incorrect strategies are implemented. In the business world, a key element of success is learning what to respond to, and then responding correctly.
What do we respond to in our churches? What do we respond to as believers? How do we respond when a response is justified? The answers to these questions will, in large part, determine our fruitfulness, faithfulness and significance.
The following guidelines should help in making godly responses:
1. Learn to say no or ignore situations which do not deserve an affirmative response. Most pastors are familiar with the type of person who constantly shares unsolicited advice. Although kingdom leaders should be constantly open to good advice, some use the opening to control the pastor. In love, learn to say no clearly.
Remember, you will answer to God, not to others, for the fruit of your calling.
2. Focus fully on the kingdom of God and ignore distractions. Some will attempt to control pastors through controlling donations. Others may threaten to fire you. Some may try to get your spouse or colleagues or others to convince you they are right. Respond to the Lord and not to the threats of others.
3. Stand for righteousness. The 21st-century culture encourages leaders to ignore sin. Lately, the pendulum has swung so far to the secular side that some are expecting religious leaders and other believers to promote sin. Penalties for even the slightest deviation from secular norms can be severe. Stand firm. We represent the King of kings and Lord of lords.
"But seek first the kingdom of God and His righteousness, and all these things shall be given to you" (Matt. 6:33).
4. Respond to challenging circumstances with thankfulness and faith. The Israelites sent 10 leaders for 40 days to spy out the promised land. It should have been 10 days of celebration. They were near to seeing the fulfillment of promises made to the patriarchs. They should have been filled with faith about the ability and willingness of the Lord to take the land for them and fulfill His promises. (The Israelites had only recently seen the Lord deliver them from the strongest nation on earth with signs and wonders. He had even allowed them to loot Egypt.)
But instead of being thankful, eight of the 10 spies moved into fear and began to grumble. Their grumbling caused the entire congregation to grumble in fear. In contrast, the other two spies, Joshua and Caleb, were faithful throughout. The entire congregation except Joshua and Caleb spent 40 years in the wilderness and did not enter the promised land. Only Joshua and Caleb received the promises.
5. Respond to the Holy Spirit and not the expectations of others. If we want revival in our churches, we will follow the Holy Spirit in our meetings and in everything we do. Praise and worship may last the entire service. Our one-hour service might turn into a three-hour service. We may hold an impromptu baptism service before people have had the baptism class. People may give messages in tongues with others interpreting, even though our church doesn't believe in tongues.
The Holy Spirit is God. He does what glorifies the Son and pleases the Father. If we are wise, we will lay aside traditions and respond to Him.
Dr. James Russell is a professor of economics and undergraduate chair of the College of Business at Oral Roberts University.
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