ECON 1000 Lecture 6: ECON 1000 - Lecture 6 - Elasticity
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ECON1010 Lecture 6Elasticity
if aprice
of agood
goesup thedemand goes
down
forexample
elasticityrelatesto any two variables
price
elasticityof demand
theresponsiveness ofthequantity
demandedof agood
to achangein its price
when au
otherinfluencesonbuying
plans
remainthe same
how
to calculate
percentage change
in quantity due to percentagechangeinprice
percentchangeinPrice
what
itis DP
YDQBI yBp
Qare Pave
formula DQ_ what
it
was 7
yDP
inelastic 3
elastic
demand
CE Elasticity
IEless
thanone inelastic
IEEC
greater
thanone elastic
iEequal
toone unitaryelastic
EC
equal
to
infinity
totalrevenue3elasticity pIl LL
change
in
price
isnegative
4unit
elastic change
inrevenue
isequal perfect unit
elastic perfectly
elastic
tozero
when
change
in
priceispositiveor
negative in
elastic demand
inelasticity whenchangeinrevenueisnegativewhen
changeinpriceisnegative
the
main
factors
that
influence
the
elasticity
of
demand
elasticity
depends
on
theclosenessofsubstitutes at
thereis similarproducts
that
canreplaceit
theamount
of
incomespent
ona
good
C
how
loyalis
thecustomertoyour
product will
they
still
buy
your
product
eveniftheprice
goes
up
time
elapsed
sinceaprice
changec
does
the
product
change
suddenlyor
does itgiveconsumerstime
to
adjust
how
broad
is agood
defined
cross
elasticityofdemandistheresponsivenessof ademandfora
good
toachangein
theprice
ofa
substituteor acomplementother
thingremain
thesame
substitutesincrease
together
complementsworkin
verse
together
your
expenditurehow
much
you
spend
3your
elasticity
ifyour
demandiselasticlowering
the
priceby1increases
theamount
you
buyby
more
thannand
increases
your
expenditurehow
much
youre
willingto
spendincreaseslow
price buymore spendmore
ifyour
demand
is
inelastic lowering
the
priceC
byHincreases
theamount oubuybymoyre
thannand
your
expenditure how
much
you're
willing
to
spend decreases
low
price buya
little
more willing
to
spend
less
ifyour
demand
isunitelasticlowering
the
pricec
byHincreases
the
amount
you
buyby
exactlyit and
your
expenditure how
much
you're
willing
tospend does
not
change
income
elasticityof
demand
grow
the
quantity
demanded
ofa
good
responds
to achange inincome
formula t.ch nquanY
changeinincome
