ECON 208 Chapter Notes - Chapter 4: Economic Equilibrium, Demand Curve, Normal Good
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ECON 208 Full Course Notes
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Demand is said to be elastic when quantity demanded is quite responsive to change in price. When quantity demanded is unresponsive to changes in price, demand is said to be inelastic. The more responsive the quantity demanded is to changes in price, the less the change in equilibrium price and the greater the change in equilibrium quantity resulting from any given shift in the supply curve. The slope of a demand curve tells us by how much price must change to cause a unit change in quantity demanded) i. ii. Initial equilibrium prices and quantities are the same i. ii. iii. Did not need to distinguish between percentage change and absolute change. The larger absolute change will also be the larger percentage change when equilibrium prices and quantities are the same in both graphs. More revealing to know the percentage change in the prices of various products.