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Unformatted text preview: $4 Quantity Price Demand 1. A 22% increase in price . . . 2. At exactly $4, consumers will buy any quantity. 1. At any price above $4, quantity demanded is zero. 2. . . . leads to a 67% decrease in quantity demanded. 3. At a price below $4, quantity demanded is infinite. Figure 5-1 T HE P RICE E LASTICITY OF D EMAND . The price elasticity of demand determines whether the demand curve is steep or flat. Note that all percentage changes are calculated using the midpoint method....
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This note was uploaded on 07/30/2010 for the course ECON 120 taught by Professor Abijian during the Spring '10 term at Mesa CC.
- Spring '10