ECON101 Chapter Notes - Chapter 4: Unit

• School: University of Waterloo
• Department: Economics
• Course: ECON101
• Professor: Corey Van De Waal

Document Summary

If your demand for the good is elastic, a 1% price cut increases the quantity you buy by. More than 1% and your expenditure on the item increases. If you spend more on an item when its price falls your demand of the good is. If your demand for the good is inelastic, a 1% price cut increases the quantity you buy by less than 1% and your expenditure on the item decreases. If you spend less on an item when its price falls your demand of the good is. If your demand for the good is unit elastic, a 1% price cut increases the quantity you buy by 1% and your expenditure on the item does not change. If you spend the same amount on an item when its price falls your demand of the good is unit elastic.