ECN 104 Chapter Notes - Chapter 4: Cormac Mac Airt, Independent Goods, Complementary Good
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Other things equal, consumers will buy more of a product when its price declines and less when its price increases: responsiveness of consumers to a price change is measured by a product"s price elasticity of demand. Other things equal, consumers will buy more of a product when its price declines and less when its price: responsiveness of consumers to a price change is measured by a product"s price elasticity of demand. Demand is elastic: if specific percent change in price results in a larger percent change in quantity demanded, edis greater than 1. If specific percentage change in price produces a smaller percentage change in quantity demanded, demand is: edis less than 1. Percentage change in price and the resulting percentage change in quantity demanded are the same: edis exactly 1. Elastic demand: if specific percent change in price results in a larger percent change in quantity demanded.