elastnotes - |E I | = 1 : Unit Elastic |E I | < 1 :...

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Notes: Types of Elasticity Price Elasticity % Q D E P = ————— % P Q 2 - Q 1 ————— Q 2 + Q 1 ——— 2 E P = ——————— P 2 - P 1 ————— P 2 + P 1 ——— 2 Œ If E P is + Supply E P is - Demand E p = Perf. Inelas. = 0 E p = Perf. Elas. = infinity Œ |E P | > 1 : Elastic |E P | = 1 : Unit Elastic |E P | < 1 : Inelastic Income Elasticity % Q D E I = ————— % I Q 2 - Q 1 ————— Q 2 + Q 1 ——— 2 E I = ——————— I 2 - I 1 ————— I 2 + I 1 ——— 2 Œ If E I is + Sup/Normal E I is - Inferior E I is 0 Neutral Œ |E I | > 1 : Elastic
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Unformatted text preview: |E I | = 1 : Unit Elastic |E I | < 1 : Inelastic Cross Elasticity % Q D X E X,Y = % P Y Q 2 X- Q 1 X Q 2 X + Q 1 X 2 E X,Y = P 2 Y- P 1 Y P 2 Y + P 1 Y 2 If E X,Y is + Substitute E X,Y is - Complement E X,Y is 0 Unrelated |E X,Y | > 1 : Elastic |E X,Y | = 1 : Unit Elastic |E X,Y | < 1 : Inelastic...
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This note was uploaded on 10/26/2009 for the course ECON 180-004-20 taught by Professor Bresnock during the Fall '09 term at UCLA.

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