Class Notes (836,321)
Canada (509,732)
Economics (806)
ECON101 (300)
Lecture

Elasticity.docx

6 Pages
86 Views
Unlock Document

Department
Economics
Course
ECON101
Professor
Yasser Fahmy
Semester
Winter

Description
ElasticityElasticity allows us to analyze supply and demand with greater precisionis a measure of how much buyers and sellers respond to changes in market conditions Price elasticity of demand is a measure of how much the quantity demanded of a good responds to a change in the price of that good Price elasticity of demand is the percentage change in quantity demanded given a percent change in the priceDemand tends to be more elastic the larger the number of close substitutes Availability of Close Substitutesif the good is a luxury Necessities versus Luxuriesthe more narrowly defined the marketDefinition of the Marketthe longer the time period durability longer means more elasticTime HorizonComputing the Price Elasticity of DemandpercentagechangequantitydemandedPriceelasticityofdemandpercentagechangepriceThe Midpoint method a better way to calculate percentage changes and elasticity The midpoint formula is preferable when calculating the price elasticity of demand because it gives the same answer regardless of the direction of the changeP2P1Q2Q12PriceelasticityofdemandQ2Q1P2P12
More Less

Related notes for ECON101

Log In


OR

Join OneClass

Access over 10 million pages of study
documents for 1.3 million courses.

Sign up

Join to view


OR

By registering, I agree to the Terms and Privacy Policies
Already have an account?
Just a few more details

So we can recommend you notes for your school.

Reset Password

Please enter below the email address you registered with and we will send you a link to reset your password.

Add your courses

Get notes from the top students in your class.


Submit