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Unformatted text preview: Income elasticity of demand: % change in quantity over % change in income * Positive if its normal goods, negative if its inferior goods If demand is inelastic, an increase in price WILL increase total revenue. Cross price elasticity of demand: % change in Q1/% change in P2 *Positive for substitutes, negative for complement Long run supply is always more elastic Supply is more elastic in the bottom, inelastic at top...
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- Winter '10