ELASTICITY - R Larry Reynolds - 1999 Elas ticity is a m...

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(c) R Larry Reynolds 09/27/2011 R Larry Reynolds - 199 Elasticity is a measure of the responsiveness of one variable (a dependent variable) to changes in another variable. The coefficient of elasticity is defined as the percentage change in a dependent variable associated with a percentage change in an independent variable. In economics the percentage change in the quantity demanded of a good caused by a change in the price of that same good is called the "own" price e lasticity of demand or price elasticity. The change in demand associated with a change in income is called income e lasticity. A change in demand caused by a change in the price of some other good is called cross elasticity. Elasticity can also be used to measure the responsiveness of suppliers to changes in price. Elasticity is a concept that is used to characterize a variety of relationships.
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Elasticity Change intercepts en a demand function: Q = 49 - 2.3 P R Larry Reynolds 199 Instructions Which can be written: P = 21.3 - 0.43 Q Demand Function ange slope of Q =f( Price Quantity $25.00 -8.5 $24.00 -6.2 Point" price elasticit $23.00 -3.9 $22.00 -1.6 At a price, P = $12.30 $21.00 0.7 Quantity is Q = 20.71 $20.00 3 About slope $19.00 5.3 lope of Q = f (P) = -2.3 $18.00 7.6 Ratio of P /Q = 0.59 $17.00 9.9 Questions $16.00 12.2 $15.00 14.5 $14.00 16.8 At price P = $12.30 $13.00 19.1 -1.3660 $12.00 21.4 % change in price will caus $11.00 23.7 1.37%hange Q demande $10.00 26 $9.00 28.3 $8.00 30.6 © R Larry Reynolds - 1999 $7.00 32.9 $6.00 35.2 $5.00 37.5 $4.00 39.8 $12.30 ### $3.00 42.1 $12.30 0 $2.00 44.4 0 ### $1.00
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ELASTICITY - R Larry Reynolds - 1999 Elas ticity is a m...

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