ECON 1B03 Lecture 5: Econ1B03 Lecture5 Elasticity
ECON 1B03 verified notes
5/13View all
Document Summary
Test results already post on avenue to learn. If the quantity demanded or supplies responds substantially to changes when one of their determinants change. If the quantity demanded responds substantially to changes when their price changes. Ep = qd / p ( the percentage change in quantity demand of the good divided by the percentage change in price) If ep > 1 => elastic, if ep < 1=> inelastic, if ep = 1 => unit elastic, if ep = 0 =>perfectly inelastic, if ep = infinity =>perfectly elastic. If the quantity demanded responds substantially to changes when their income changes. En = qd / n ( the percentage change in quantity demand of the good divided by the percentage change in income) If en > 1 => income elastic, if en < 1=> income inelastic, if en = 1 => unit elastic. If the quantity demanded of good a responds substantially to changes when the price of good b changes.