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Unformatted text preview: Quantity 10 10 7 4 Demand 6 3 Midpoint A B C Price elasticity and linear demand Price Quantity 10 10 Demand  e  = 1  e  = ∞  e  = 0 Elastic range Inelastic range Income elasticity of demand • e i could be negative, zero or positive • e i < 0: inferior good • e i > 0: normal good e i = %∆ in quantity demanded %∆ in income Crossprice elasticity of demand • e xy > 0: x and y are substitutes • e xy < 0: x and y are complements • e xy = 0: x and y are unrelated e xy = %∆ in quantity demanded of x %∆ in price of y...
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This note was uploaded on 10/17/2011 for the course ECON 101 taught by Professor Dezhbakhsh during the Fall '07 term at Emory.
 Fall '07
 Dezhbakhsh
 Economics, Price Elasticity

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