Elasticity

Elasticity is the extent to which one variable responds to another variable.

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When comparing the change in demand with the change in price what are we measuring?
Price elasticity
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With price elasticity, if demand has changed by a smaller percentage than the price, the good is said to be:
Price inelastic
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How do you work out percentage change?
New data - old data/old data x 100
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What are the different types of elasticity?
Price elasticity of demand, Cross elasticity of demand, Income elasticity of demand, Price elasticity of Supply
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What does a steep demand curve show with PED?
That demand is relatively price inelastic
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When XED is positive, the goods are said to be..
Complentary
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If cross elasticity of demand is postive, the goods are said to be..
Substitutes
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What does elasticity measure?
The proportionate responsiveness of the second variable to the change in the first variable
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What is the formula for price elasticity of supply?
% change in quantity supplied (divided by) % change in price
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Other cards in this set

Card 2

Front

With price elasticity, if demand has changed by a smaller percentage than the price, the good is said to be:

Back

Price inelastic

Card 3

Front

How do you work out percentage change?

Back

Preview of the front of card 3

Card 4

Front

What are the different types of elasticity?

Back

Preview of the front of card 4

Card 5

Front

What does a steep demand curve show with PED?

Back

Preview of the front of card 5
View more cards

Comments

Damilola

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wow...only got 3 questions wrong....very pleased with myself :)

Alex W

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Cross elasticity - Positive is subsitute goods not complementary! Otherwise good.

derby

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two answers wrong ;)

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