ECN 104 Lecture Notes - Demand Curve, Comparative Advantage, Opportunity Cost

131 views19 pages

Document Summary

How is it related to revenue and expenditure: what, what are the income and cross-price elasticities of demand, elasticity, basic idea: elasticity measures how much one variable responds to changes in another variable. One type of elasticity measures how much demand for your websites will fail if you raise your price: definition: elasticity is a numerical measure of the responsiveness of. Q(demand) and q(supply) to one of its determinants: price elasticity of demand, price elasticity of demand measures how much of q(demand) responds to change in p(price, price elasticity of demand = percentage change in q(demand) / Percentage change in p(price: loosely speaking, it measures the price-sensitivity of buyers" demand, along a d curve, p and q move in opposite directions, which would make price elasticity negative. Prices of both goods rise by 20%, for which good does qd drop the most: to millions of diabetics, insulin is a necessity.