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Writetheformuladown 2 donotusenegativenumbers 3

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Unformatted text preview: s 21:15 Inelastic vs Elastic Five tests for figuring out elasticity of demand 21:15 Inelastic vs Elastic 21:15 Inelastic­Few substitutes Elastic­Many Substitues Inelastic­Necessity Elastic­ Luxury Inelastic­ Inexpenisve Elastic­ Expensive PxQ=TR (total revenue) Inelastic­ Price increases total revenue increases Elastic­ Price increases total revenue decreases To figure out the coefficient you must know the formula for Elasticity of Demand Formula for elasticity of demand Ed= the percentage change in quantity demanded divided by the percentage change in price Ed= %Δ in Qd/ %Δ in P Numerator: %Δ in Qd= Δ in Qd/ Qd Denominator: %Δ in P= Δ in P/ P ED= Δ in Qd/ Qd x P/ ΔP The 5 steps in figuring out the elasticity coefficient: 1. Write the formula down 2. DO N...
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