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ECN 104 (447)
Lecture

Chapter 5: Elasticity and its Application

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Department
Economics
Course
ECN 104
Professor
Tsogbadral Galaabaatar
Semester
Fall

Description
Chapter 5 Elasticity and its Application y Elasticity measures how much one variable responds to changes in another variableo A numerical measure of the responsiveness of Qd or Qs to one of its determinantso Price elasticity is higher when close substitutes are available o Price elasticity is higher for narrowly defined goods than broadly defined ones o Princes elasticity is higher for luxuries than necessities o Prince of elasticity is higher in the long run than short run Price Elasticity of DemandPercentage change in QsPercentage Change in P y Measures how much Qd responds to a change in P y It measures the pricesensitivity of buyers demand y Disregard negative sign Calculating Percentage Changes Midpoint Method y End valueStart ValueMidpoi
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