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Microeconomics Ch. 6
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Price Elasticity of Demand
The responsiveness of the Quantity demanded to change in its own price.
Ed = % ΔQd/ % ΔP
Price Elasticity
|% ΔQd/ % ΔP|
Elastic Demand
lots of substitutes and very responsive to price change
|Ed|>1
Inelastic Demand
limited substitutes
|Ed|<1
Inelastic demand between two prices
price and TR are directly related.
Elastic between two prices
the price and TR are indirectly related.
Cross-Price Elasticity of Demand
Ec=% ΔQda / % ΔPb
Income Elasticity of Demand
Ey=% ΔQd / % ΔY
Price Elasticity of Supply
Es=% ΔQs / % ΔP
Perfectly Elastic
horizontal Demand Curve
Perfectly Inelastic
Vertical Demand Curve (no matter what price the Qd does not change)
Author
Anonymous
ID
11875
Card Set
Microeconomics Ch. 6
Description
equations and definitions
Updated
2010-03-24T23:47:05Z
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