Redefining Price in Demand Elasticity: A Comparative Analysis of Consumer Cost in Advertising and Open Source Digital Business Models

Demand elasticity measures how much the quantity demanded changes in response to a change in one of its factors. Similar to traditional businesses, demand elasticity also has an important role in deciding business strategies of online and digital businesses. This paper explores the substitutes for price in the demand elasticity chart of the Advertising and Open source digital business models. Consumer cost in these models can be defined as non-monetary and therefore non-traditional. The paper uses comparative analysis as the main methodology. The information about demand elasticity, business models and the factors influencing consumer usage under the Advertising and Open source business models were collected from reputable academic documents. This paper finds that the price axis of the Advertising model in the demand elasticity chart can be redefined as ad relevance, ad placement/structure or ad content influences. In the case of open source, the price axis in the demand elasticity chart can be redefined as interoperability and compatibility, licensing model or community support and activity