Price elasticity of demand refers to the relationship between the price of a product and the quantity of the product that is demanded by consumers.
A product's demand is said to be elastic if, when the price goes up, revenues go down. If the price goes up and revenues go up, then demand is inelastic.
For a manager, this is very important information. If a manager knows the elasticity of the demand for his firm's product, he will be able to know whether to raise or lower prices. This is surely a very important decision for any manager to make.