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And i quote focus on elasticity for the midterm exams. Know how to calculate elasticity and be prepared to do elasticity problems. Px : price of the good (causes movement along the curve); direct relationship. Py : price of related goods (causes a shift in the curve); direct or inverse relationship depending on the type of product. I : income (causes a shift in the curve); direct relationship. U : utility or preferences (causes a shift in the curve); direct relationship. Pop : population (causes a shift in the curve); direct relationship. Qd = - 0 px + 1 py + 2 i. Is a sensitivity factor and is given in most cases. Inelastic and elastic demand: perfectly inelastic demand. Qd is not dependent on p at all. Elasticity = 1: % change qd = % change p example: university of michigan football tickets.

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