ECON 201 Lecture Notes - Lecture 5: Supreme Headquarters Allied Powers Europe, Move, Opportunity Cost
Document Summary
A measure of how much buyers and sellers respond to changes in market. If something is elastic, it is sensitive to change. A measure of the responsiveness of quantity demanded or. Formal elasticity definition: quantity supplied to one of its determinants. When studying how some event or policy affects a market, we can discuss not only the direction of the effects but their magnitude as well, magnitude is important. A measure of how much the quantity demanded of a good. Bigger the price, stronger the law demand is to income. Remember demand can be affected by many other things . The price elasticity of demand and its determinants. Availability of close substitutes: availability of close substitutes. If electricity price would increase a lot, your demand would change for years as bulbs burns you you replace them with dimmer or more efficient bulbs more time to respond and price. You are more elastic in long run than short.