If the elasticity of demand is greater than or equal to 1

If the elasticity of demand is greater than or equal to 1 -...

Info iconThis preview shows pages 1–2. Sign up to view the full content.

View Full Document Right Arrow Icon

Info iconThis preview has intentionally blurred sections. Sign up to view the full version.

View Full DocumentRight Arrow Icon
This is the end of the preview. Sign up to access the rest of the document.

Unformatted text preview: If the elasticity of demand is greater than or equal to 1, meaning that the percent change in quantity is great than the percent change in price, then the curve will be relatively flat and elastic: small price changes will have large effects on demand. If the elasticity of the demand curve is less than 1, meaning the percent change in quantity is less then the percent change in price, then the curve will be steep and inelastic: it will take a big change in price to affect demand. Similarly, if the elasticity of supply is greater than or equal to 1, the curve will be elastic: relatively flat, with quantity supplied very responsive to changes in price. If the elasticity of the supply curve is less than 1, it will be inelastic: the curve will be flatter and quantity supplied will be less responsive to changes in price. Remember that elasticity is an absolute value; it doesn't indicate an increase in quantity...
View Full Document

This note was uploaded on 12/13/2011 for the course ECO 1320 taught by Professor Staff during the Fall '11 term at Texas State.

Page1 / 2

If the elasticity of demand is greater than or equal to 1 -...

This preview shows document pages 1 - 2. Sign up to view the full document.

View Full Document Right Arrow Icon
Ask a homework question - tutors are online