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Unformatted text preview: Percentage change in price = [(new $ - initial $)/ initial price] *100 Midpoint Method: To calculate the %change in the price divide the change in the price by the AVERAGE price and then multiply by 100 Elastic demand: > 1 United elastic demand: = 1 Inelastic demand: < 1 Elasticity is how sensitive people are to a change in price Slopes are NOT tied to elasticity. Similar but not the same Elasticity has no units so we can compare to everything but slopes we can’t The more substitutes, the more sensitivity...
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This note was uploaded on 09/29/2009 for the course ECON 101 taught by Professor Balaban during the Spring '07 term at UNC.
- Spring '07