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Unformatted text preview: the longer the time period Inelastic Demand: Quantity demanded does not respond strongly to price changes Price elasticity of demand is less than one Elastic Demand Quantity demanded responds strongly to changes in price Price elasticity of demand is greater that one Perfectly Inelastic Quantity demanded does not respond to price changes ex. insulin Perfectly Elastic Quantity demanded changes infinitely with any changes in price Unit Elastic Quantity demanded changes by the same percentage as the price Elasticity of demand changes at every point Price Elasticity at point A=P A /Q A * 1/Slope Total revenue is the amount paid by buyers and received by sellers of a good. Computed as the price of the good times the quantity sold. TR=P*Q a.250/day b..50/500 1/-10 = -1 c....
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This note was uploaded on 04/20/2008 for the course ECON 304K taught by Professor Ledyard during the Spring '08 term at University of Texas at Austin.
- Spring '08