21 Wednesday, October 18, 2006

21 Wednesday, October 18, 2006 - Relatively inelastic...

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Wednesday, October 18, 2006 Microeconomics ELASTICITY OF SUPPLY Q 2 s – Q 1 s % ∆ Q s Q 2 s + Q 1 s E s,p = = = Always > 0 = Price elasticity of supply % ∆ P P 2 – P 1 P 2 + P 1 E s,p will always be positive because of the law of supply P S1 Relatively Inelastic P1 S2 Relatively Elastic P0 Q0 Q1 Q2 Q Relatively elastic supply – quantity supplied responds substantially to change in price
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Unformatted text preview: Relatively inelastic supply quantity supplied responds slightly to change in price 2 SPECIAL CASES P % Q s P % Q s X E s,p = = = 0 E s,p = = = % P X D % P Perfectly Elastic D = Perfectly Inelastic Q Q...
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This note was uploaded on 03/20/2008 for the course EC 201 taught by Professor Xasdf during the Fall '08 term at N.C. State.

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