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Unformatted text preview: measures the responsiveness or sensitivity of consumers to change in price of consumers to change in price of a good or service. = % % ∆Q ∆P = = * = ϑ ∆QQ∆PP ∆QQ P∆P ∆Q∆P Range of Elasticities Elastic – Segment of demand for which < -ϑ 1 In mathematical terms demand is elastic when the numerator is greater then the denominator (%changeP) TR increases with a decrease in price + TR decreases with an increase in price in the elastic range of demand curve. Inelastic segment of demand for which ϑ >-1 In mathematical terms demand is inelastic when %changeQ is less then %changeP. TR will increase with an increase in price + TR will decreae with a decrease in price in the inelastic range of demand curve....
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- Spring '10
- Supply And Demand, market demand schedule, laptop computer, Market demand function