elasticity

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1. When elasticty is greater than 1
demand is elastic
2. You got a elasticty of 1.5. what does this mean?
A coefficient of 1.5 for price elasticity of demand means that for every 1 pecent chnage in price,  there will be a corresponding 1.5 percent change in quantity demanded in the opposite direction of the price change. Demand is elastic.
3. price elasticity of demand formula
• Q2 - Q1            P2 + P1
• —————   X   —————
• Q2 + Q1            P2 - P1
4. Inelastic demand
elasticity less than 1
5. If elasticity is exactly 1
it is called unit elastic
6. Perfect elasticity
Perfrectly horizontal line on graph
7. perfect inelasticity
perfect vertical line on graph
8. The more flat a demand curve is
the more elastic it is
9. on a demad curve....
very elastic at the top and progressively less elastic down the curve
10. something that is elastic
• - has a lot of substitutes
• - when price changes a little and quantity demanded changes a lot
11. something that is inelastic
• - has fewer substitutes
• - lots of price change and little change in quantity demanded
 Author: Anonymous ID: 175833 Card Set: elasticity Updated: 2012-10-06 10:44:33 Tags: elasticity Folders: Description: econ 2 Show Answers: