ECON101 Lecture Notes - Lecture 6: Demand Curve, Substitute Good, Negative Number

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grayreindeer880

13 Jan 2017

School

University of Delaware

Department

Economics

Course

ECON101

Professor

Kievana Haynes

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Document Summary

Types of elasticities: demand, price elasticity of demand, cross-price elasticity of demand, income elasticity of demand, supply, price elasticity of supply. 1. price elasticity of demand (see slides for formula: price elasticity of demand: measures the responsiveness (or sensitivity) of buyers to a price change. The more negative elasticities are referred to as being larger or higher . The midpoint formula for elasticity(see slides for formula: we use the midpoint formula to calculate the percentage changes, the midpoint formula avoids the confusion of whether we are going from a to b or from b to. A: we use the average of a and b in the denominator instead of choosing one of them. Price elasticity of demand and the demand curve: elastic demand: the case where the price elasticity of demand is larger (in absolute value) than 1. Example: a 10% increase in price would result in a less than 10% decrease in quantity demanded.

Related Questions

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

The price elasticity of demand measures how much:

a. quantity demanded responds to a change in price

b. quantity demanded responds to a change in income

c. price responds to a change in demand

d. demand responds to a change in supply

yellowbee66

Address the following:

Price elasticity of demand refers to the percentage change in demand resulting from a percentage change in price.

Please review the definition of relative inelasticity and relative elasticity. These terms refer to how much demand changes based on a change in price.

1) Choose any three products and classify and describe their price elasticity of demand; (relatively inelastic, relatively elastic, perfectly elastic, perfectly inelastic, or unitary elastic; your three product should illustrate different elasticities; ie: do not chose two relatively inelastic products)

2) Discuss what happens to the demand when the price changes for each of your items, specifically how much does demand change when the price changes?

3) Explain why demand changes the way it does for each of your three products

erinbuffalo510

ECON101 Lecture Notes - Lecture 6: Demand Curve, Substitute Good, Negative Number

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