Lecture Notes 3-2-10 - Notes Chapter 5 Economics T-Th...

Info iconThis preview shows pages 1–2. Sign up to view the full content.

View Full Document Right Arrow Icon
Notes: 3-2-10 Economics T-Th A. Ordonez Chapter 5 809-195-3K1C 3/2/10 o Elasticity o also: is a measure of how much buyers & sellers respond to changes in market conditions. The price elasticity of demand is a measure of how much the quantity demanded of a good or service responds to a change in the price of that good or service. The Price elasticity of demand is the % change in the quantity demanded due to a % change in price. Price elasticity of demand = % change in quantity demanded % change in price More Elasticity - quantity demanded responds substantially to change in price. Less Elasticity - (inelastic) quantity demanded responds only slightly (or not at all) to change in price. The Determinants of Price Elasticity of Demand 1. Availability of close substitutes The larger the number of close substitutes, the more elastic the demand tends to be 2. Necessities VS. Luxuries
Background image of page 1

Info iconThis preview has intentionally blurred sections. Sign up to view the full version.

View Full DocumentRight Arrow Icon
Image of page 2
This is the end of the preview. Sign up to access the rest of the document.

This note was uploaded on 05/10/2010 for the course ECONOMICS 809-195-3K taught by Professor A.ordonez during the Spring '10 term at Gateway Tech.

Page1 / 2

Lecture Notes 3-2-10 - Notes Chapter 5 Economics T-Th...

This preview shows document pages 1 - 2. Sign up to view the full document.

View Full Document Right Arrow Icon
Ask a homework question - tutors are online