Econ101September17 - Econ 101 Elasticity Responsiveness...

Info icon This preview shows page 1. Sign up to view the full content.

Econ 101 September 17, 2007 Elasticity : Responsiveness measures; Measurement of the percentage of change in one variable that results from a 1% change of another variable -Can compare across markets because it is unit-less -Inter (across) markets and Intra (within) market Two important elasticities: Price elasticity of demand, Price elasticity of supply: often referred to as “own” price elasticities Ex.) When price of toothpaste increases by 1%, quantity demanded falls by 0.3% so toothpaste demand is not very price sensitive, elasticity = -.03
Image of page 1
This is the end of the preview. Sign up to access the rest of the document.

Unformatted text preview: Ex.) When price of sports cars increases by 1%, demand goes down by 2%, demand is very price sensitive, elasticity = -2 Ex.) When price of undeveloped metropolitan land increases by 1%, the quantity supplied doesn’t change, its totally insensitive to the price Ex.) When price of poultry increases by 1%, the quantity supplied increases by 4, very sensitive, elasticity = 4 Inelastic = Elasticity between 0-1 Elastic = elasticity greater than 1 Unit elastic = elasticity = 1 FORMULA: P...
View Full Document

{[ snackBarMessage ]}

What students are saying

  • Left Quote Icon

    As a current student on this bumpy collegiate pathway, I stumbled upon Course Hero, where I can find study resources for nearly all my courses, get online help from tutors 24/7, and even share my old projects, papers, and lecture notes with other students.

    Student Picture

    Kiran Temple University Fox School of Business ‘17, Course Hero Intern

  • Left Quote Icon

    I cannot even describe how much Course Hero helped me this summer. It’s truly become something I can always rely on and help me. In the end, I was not only able to survive summer classes, but I was able to thrive thanks to Course Hero.

    Student Picture

    Dana University of Pennsylvania ‘17, Course Hero Intern

  • Left Quote Icon

    The ability to access any university’s resources through Course Hero proved invaluable in my case. I was behind on Tulane coursework and actually used UCLA’s materials to help me move forward and get everything together on time.

    Student Picture

    Jill Tulane University ‘16, Course Hero Intern