PRICE ELASTICITY OF DEMAND.

View mindmap
  • PRICE ELASTICITY OF DEMAND.
    • PRICE ELASTICITY OF DEMAND.the responsiveness of changes in quantity demanded to changes in price.
      • ELASTIC DEMAND.price elasticity of demand is greater than 1.responsiveness of demand is proportionally greater than the change in price. demand is perfectly elastic if it is infinity.
        • INELASTIC DEMAND. price elasticity of demand is less than 1.responsiveness of demand is proportionally less than the change in price. demand it is perfectly inelastic if it is zero.
          • UNITARY ELASTICITY.where the value of price elasticity of demand is 1.responsiveness of demand is proportionally equal to the change in price.
    • FORMULApercentage change in quantity demanded/ percentage change in price.
      • TOTAL EXPENDITURE= QUANTITY PURCHASED* PRICE
        • TOTAL REVENUE= QUANTITY SOLD* PRICE
    • ALTERNATIVE FORMULA.percentage change= new value - original value/ original value* 100%

Comments

No comments have yet been made

Similar Economics resources:

See all Economics resources »See all price elasticities resources »