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# 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 measureof theresponsiveness of onevariable(a dependent variable) to changes in another variable. Thecoefficient of elasticity is defined as thepercentagechangein a dependent variable associated with a percentagechangein an independent variable. In economics thepercentagechangein thequantity demanded of a good caused by a changein theprice of that samegood is called the"own" pricee lasticity of demand or priceelasticity. The changein demand associated with a changein income is called incomee lasticity. A change in demand caused by a changein thepriceof some other good is called cross elasticity. Elasticity can also beused to measure theresponsiveness of suppliers to changes in price. Elasticity is a concept that is used to characterize a variety of relationships.

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(c) R. Larry Reynolds 09/27/2011 Elasticity Change intercepts en a demand function: Q = 49 - 2.3 P © R Larry Reynolds 199 nstructions Which can be written: P = 21.3 - 0.43 Q Demand Function hange slope of Q =f( Price Quantity \$25.00 -8.5 \$24.00 -6.2
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ELASTICITY - R Larry Reynolds 1999 Elas ticity is a m...

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