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Unformatted text preview: change in demand - changes inc consumer income will cause the demand curbe to shift consumer surplus is the right triangle of a curve perfectly inelastic curve is vertical prefectly elastic curve is horizontal calculation of elasticity (Qa-Qb) / ([Qa+Qb] / 2) (Pa-Pb) / ([Pa+Pb] / 2 formula above measures arc elasticity if greater than one elastic (greater than percentage change in price) if own-price elasticity equal to one unitary elastic (same as percentage change in price) less than one inelastic (less than percentage change in price) marginal rate of subsitution (MRS) MRS is always negative net income = income minus expenses equity - assets minus liabilities came up with concept of price elasticity...
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- Spring '08
- Supply And Demand, market demand curve, Price Consumption Curve, perfectly inelastic curve, consumption engel curve