ECON 1000 Lecture Notes - Lecture 3: Bomb Disposal, Midpoint Method, Negative Number
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Fysm econ september 26th, 2017 elasticity and its. Elasticity: is a measure of how much buyers and sellers respond to changes in market conditions. We can discuss no only the direction of the effects of market changes but their magnitude as well. To measure how much consumers, respond to changes in these variables, economist use the concept of elasticity. The law of demand: a fall in the price of a good raises the quantity demanded. Price elasticity of demand: measures how much the quantity demanded responds to a change in price computed as the percentage change in quantity demanded divided by the percentage change in price. Demand for a good is said to be elastic if the quantity demanded responds substantially to changes in the price. Demand is said to be inelastic if the quantity demanded responds only slightly to changes in the price.