ECON 208 Lecture Notes - Lecture 5: Demand Curve, Negative Relationship, Ski Lift
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ECON 208 Full Course Notes
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Document Summary
Demand said to be elastic when quantity demanded is very responsive to a change in the products own price. Demand inelastic if quantity demanded is unresponsive to changes in its prices. Elasticity is related to the slope of the demand curve but is not exactly the same. Things with substitutes can be very elastic --> respond more to price change. We can only do the visual comparison (comparing the slope of the demand curve) if both figures are drawn on the same scale and we start form the same price-quantity equilibrium. Otherwise we need to know the percentage change in the prices and quantities of the various products quantities of the various products. T-shirts per shirt 25. 000 shirts iphones per iphone. Demand elasticity is negative but economists usually emphasize the absolute value. Elasticity usually measures the change in p and q relative to some base values of p and q.