EC201-Chp6

EC201-Chp6 - EC201 Chapter 6 Terms Elasticity A measure of...

Info icon This preview shows pages 1–2. Sign up to view the full content.

View Full Document Right Arrow Icon
EC201- Chapter 6 Terms Elasticity - A measure of how much one economic variable responds to changes in another economic variable. Price Elasticity of Demand - Measured by the responsiveness of the quantity demanded to a change in price. Percentage Change in Quantity Demanded ÷ Percentage Change in Price Elastic Demand - Demand is elastic when the percentage change in quantity demanded is greater than the percentage change in price. Price Elasticity > 1 in Abs. Value Inelastic Demand - Demand is inelastic when the percentage change in quantity demanded is less than the percentage change in price. Price Elasticity < 1 in Abs. Value Unit-Elastic Demand - Demand is unit-elastic when the percentage is equal to the percentage change in price. Price Elasticity = 1 in Abs. Value Price Elasticity of Demand = (Q2-Q1)÷((Q1+Q2)÷2) ÷ (P2-P1)÷((P1+P2)÷2) Perfectly Inelastic Demand - Quantity demanded is completely unresponsive to price.
Image of page 1

Info iconThis preview has intentionally blurred sections. Sign up to view the full version.

View Full Document Right Arrow Icon
Image of page 2
This is the end of the preview. Sign up to access the rest of the 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