ECON 101 2Midtermreview

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Unformatted text preview: elasticity of demand is less than zero (negative) the good is an inferior good. Elasticity of Supply The elasticity of supply measures the responsiveness of the quantity supplied to a change in the price of a good when all other influences on selling plans remain the same. The elasticity of supply is calculated by using the formula: Percentage change in quantity supplied Percentage change in price The Factors That Influence the Elasticity of Supply The elasticity of supply depends on Resource substitution possibilities Time frame for supply decision Chapter 5: Efficiency and Equity Scare resources might be allocated by Market price Command Majority rule Contest First- come, first- served Sharing equally Lottery Personal characteristics Force How does each method work? Market Price When a market allocates a scarce resource, the...
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This note was uploaded on 03/29/2014 for the course ECON 101 taught by Professor Vanderwaal during the Spring '08 term at Waterloo.

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