ECON 208 Lecture 5: CHAPITRE 4
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Elasticity chapter 4: price elasticity of demand, if there is a decrease in the supply of sth -> leftward shift of the demand curve. Useful to have an estimation of the demand. Demand elasticity is negative, but economists usually emphasize the absolute. Demand curve that looked steeper had the larger absolute slope. When we deal with the same initial price, we do not need to distinguish the percentage changes and absolute changes. But when the prices are initially different, we need to decide whether we are interested in absolute or percentage changes. > example : each price"s reduction for every product is but they are clearly different proportions of the respective prices. It is usually more revealing to know the percentage change in the prices of the various products. Elasticity along a linear demand curve when : n=infinity : perfectly elastic n>1 : elastic n=1 unit elastic n<1 : inelatsic n=0 perfectly inelastic.