Location via proxy:   [ UP ]  
[Report a bug]   [Manage cookies]                
Scribd Logo
Upload

Welcome to Scribd!

  • 8 views

    Elasticity

    Uploaded by

    tpequit

    Copyright:

    © All Rights Reserved
    Download as PDF, TXT or read online from Scribd

    Elasticity

    Uploaded by

    tpequit
    8 views1 page

    Copyright

    © © All Rights Reserved

    Available Formats

    PDF, TXT or read online from Scribd

    Did you find this document useful?

    Is this content inappropriate?

    Copyright:

    © All Rights Reserved
    Download as PDF, TXT or read online from Scribd
    Download as pdf or txt
    8 views1 page

    Elasticity

    Uploaded by

    tpequit

    Copyright:

    © All Rights Reserved
    Download as PDF, TXT or read online from Scribd
    Download as pdf or txt
    You are on page 1of 1

    Elasticity: The action or response of consumers to unit inelastic when it equals 1.

    Therefore, the flatter


    changes in products and services the curve, the greater the price elasticity of the
    demand, and the steeper the demand curve, the
    Price elasticity of demand: observes how the
    smaller its price elasticity.
    quantity demand of consumers responds to changes
    in prices. A product can either be elastic or inelastic. Total revenue: the amount a buyer paid to buy the
    Inelastic when the quantity demand is not changed or product or services of a seller. The total revenue is
    heavily affected by the change, and elastic when the the price multiplied by the quantity sold.
    quantity demand is affected heavily by the changes
    Income elasticity of demand determines how the
    in price. This have various factors that affects it
    change in consumers income affects the quantity
    namely:
    demanded. To calculate the income elasticity of
    • Availability of close substitutes: more demand, divide the percentage change in quantity
    substitute products are more elastic as demanded by the percentage change in price.
    consumers have other options.
    Cross-price elasticity of demand determines how the
    • Necessities versus luxury: needs vs. wants
    changes in demand for a good affect the price of
    Needs tend to be more inelastic, and wants
    another good in the market. It is computed by
    are more elastic.
    dividing the percentage change in demand of one
    • Definition of the market: Changes in
    product by the percentage of another product.
    quantity demand are based on how needed
    the product is. The price elasticity of supply and its
    • Time horizon: changes tend to show up in determinants determine how the quantity of supply
    the long run compared to the present or short is affected by the price. Measures if it is inelastic or
    period. elastic. In the market, the determinant is time. It tends
    to be that supply is affected in the long run and can
    Price elasticity of demand is computed by dividing
    be inelastic in the short term. This is computed by
    the percentage change in demand by the percentage
    dividing the percentage change in supply by the
    change in price.
    percentage change in price. This computation

    The midpoint method is an easier way of computing determines whether the supply curve is steep or flat.

    the price elasticity of demand. In this equation, the


    Supply, demand, and elasticity are connected to each
    middle number separating the two given numbers is
    other. However, good news for one isn’t always good
    used and is the basis of the computation.
    news for the other.

    In economics, demand is considered elastic if it is


    greater than 1, inelastic when it is less than 1, and

    You might also like