ECN 360 - MIDTERM TOPICS
Topic I Elasticity
Price Elasticity of Demand - solve for one variable if given the other two: E, %P, %Q
Price Elasticity of Demand and Total Revenue - if PED is elastic/inelastic what happens if P
increases/decreases?
Determin
ECN cheat sheet
Perfect competition
PED= % ^Qd/%^P
P=MR
PES= %^Qs/%^P
~ max MR=MC
CED= %^QdX/%^PY
Short run: A time period when at
least one input, such as plant size,
cannot be changed
Incm E= %^Q/%^Incm
Inelastic= <1
Unit elastic= 1
Perfect competition: