Elasticity

Elasticity - Elasticity: A measure of how much one economic...

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Elasticity: A measure of how much one economic variable responds to changes in another economic variable. Price elasticity of demand: the responsiveness of the quantity demanded to a change in price, measured by dividing the percentage change in the quantity demanded of a product demanded of a product by the percentage change in the product’s price Elastic demand: Demand is elastic when the percentage change in quantity demanded is greater than the percentage change in prince, so the price elasticity is greater than 1 in absolute value Inelastic demand: Demand is inelastic when the percentage change in quantity demanded is less than the percentage change in price, so the price elasticity is less than 1 in absolute value Unit-elastic demand: Demand is unit elastic when the percentage change in quantity demanded is equal to the percentage change in price, so the price elasticity is equal to 1 in absolute value. The flatter the demand curve-the more elastic (smaller slope) and the one with the larger
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This note was uploaded on 11/16/2011 for the course ECON 1011 taught by Professor Irenefoster during the Fall '11 term at GWU.

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Elasticity - Elasticity: A measure of how much one economic...

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