ECON 101 Chapter Notes - Chapter 6: Externality, Demand Curve
Document Summary
Chapter 6: externalities, environmental policy, and public goods. Cross-price elasticity of demand: percentage change in quantity demanded of one good divided by the percentage change in the price of another good. Elastic demand: price elasticity of demand is greater than 1 in absolute value. Elasticity: how much one economic variable responds to changes in another economic variable. Income elasticity of demand: the percentage change in the quantity demanded divided by the percentage change in income. Inelastic demand: price elasticity of demand is less than 1 in absolute value. Price elasticity of demand: measures how responsive quantity demanded is to changes in price. Price elasticity of supply: percentage change in quantity supplied divided by the percentage change in price. Total revenue: total amount of funds received by a seller of a good or service. Unit-elastic demand: price elasticity of demand is equal to 1 in absolute value. 6. 1 the price elasticity of demand and its measurement: