ECON Exam 2
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price of elasticity of demand
a measure of the responsiveness of the quantity demanded to changes in price

elastic demand
the price elasticity of demand is greater than one, so the percentage change in quantity exceeds the percentage change in price

inelastic demand
the price elasticity of demand is less than one so the percentage change in quantity equals the percentage change in price

unit elastic demand
the price elasticity of demand is one, so the percentage change in quantity equals the percentage change in price

perfectly inelastic demand
the price elasticity of demand is zero

formula for the Price Elasticity of Demand (E_{d})
E_{d}= % change in quantity demanded ÷ % change in price

total revenue
the money a firm generates from selling its product

income elasticity of demand
a measure of the responsiveness of demand to changes in consumer income

formula for Income Elasticity of Demand (E_{t})
E_{t}= % change in quantity demanded ÷ % change in income

crossprice elasticity of demand
a measure of the responsiveness of demand to changes in the price of another good

formula for CrossPrice Elasticity of Demand (E_{xy})
E_{xy}= % change in quanitity of X demanded ÷ % change in price Y

price elasticity of supply
a measure of the responsiveness of the quantity supplied to changes in price

formula for Price Elasticity of Supply (E_{s})
E_{s}= % change in quantitiy supplied ÷ % change in price

perfectly inelastic supply
the price elasticity of supply equals 0

perfectly elastic supply
the price elasticity of supply is equal to ∞