ECON 200 Lecture Notes - Lecture 6: Midpoint Method, Demand Curve

32 views4 pages

greengiraffe718

11 Oct 2018

School

University of Maryland

Department

Economics

Course

ECON 200

Professor

Hossein Abbasi

For unlimited access to Class Notes, a Class+ subscription is required.

Document Summary

What is elasticity? (cid:12254) the price of the good. (cid:12254) the price of a related good. (cid:12254) income. Elasticity is a measure of the responsiveness or sensitivity to a change in a market condition. It measures the response to a change in: The elasticity of demand: the price elasticity of demand measures the magnitude of change in the quantity demanded from a change in its price. Percentage change in price if the price change from p1 to p2: Percentage change in quantity if the price change from p1 to p2 and as a result, quantity demanded changes from q1 to q2: The midpoint method calculates the elasticity at the midpoint of any two points. = (2 1)/[(2+1)/2] / (2 1)/[(2+1)/2] where point 1 is (1, 1) and point 2 is(2, 2). The midpoint elasticity is the di erence of any two numbers divided by their average.

Related Questions

a. Determine the price elasticity of demand at each quantity demanded using the arc or midpoint formula: Percentage change in quantity demanded =(Q2-Q1)/Q1 divided by percentage change in price= (P2-P1)/P1.

b. Redo exercise using price changes of $10 rather than $5.

oliveant927

Determine the price elasticity of demand at each quantity demanded using the arc or midpoint formula: Percentage change in quantity demanded =(Q2-Q1)/Q1 divided by percentage change in price= (P2-P1)/P1.

Redo the exercise using price changes of $10 rather than $5.

plumcockroach479

interval (or arc) elasticity

cross-price elasticity

price elasticity of demand

elastic demand

income elasticity

inelastic demand

inframarginal units

marginal revenue

point elasticity

price effect

quantity effect

total revenue

unitary elastic demand

1. __________________ A measure of consumersâ sensitivity or responsiveness to changes in the price of a good or service.

2. ___________________ When the percentage change in price (in absolute value) is more than the percentage change in quantity demanded (in absolute value).

3. ___________________ When the percentage change in quantity demanded (in absolute value) is more than the percentage change in price (in absolute value).

4. ___________________ When the percentage change in quantity demanded (in absolute value) is just equal to the percentage change in price (in absolute value).

5. ___________________ Total amount paid to a producer for a good or service P * Q.

6. ___________________ The effect on total revenue of a change in price, holding quantity constant.

7. ___________________ The effect on total revenue of a change in quantity, holding price constant.

8. ___________________ An elasticity calculated over an interval of a demand curve or demand schedule.

9. ___________________ Elasticity at a specific price or point on a demand curve.

10. ___________________ A measure of how responsive quantity demanded is to a change in income, all other things constant.

11. ___________________ A measure showing how responsive the quantity demanded of one good is to changes in the price of another good, other factors constant.

12. ___________________ The additional revenue received by producing and selling one more unit of output.

13. ___________________ Units of output that could have been sold at a higher price had the firm not lowered its price to sell additional (marginal) units.

coffeehornet269

ECON 200 Lecture Notes - Lecture 6: Midpoint Method, Demand Curve

Document Summary

Get access

Related Documents

ECON 200 Chapter Notes - Chapter 5: Carpool, Economic Equilibrium, Demand Curve

ECON 200 Study Guide - Final Guide: Externality

ECON 200 Lecture Notes - Lecture 1: Midpoint Method, Negative Number, Substitute Good

Related Questions