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ECON 1010 (102)
Lecture 26

ECON 1010 Lecture 26: Lecture 26
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Department
Economics
Course
ECON 1010
Professor
Laura K.Brown
Semester
Spring

Description
Oc78 Principles of Microeconomics CHAPTER 5 – Elasticity and its Application: The Elasticity of Demand: 1. Elasticity: a measure of the responsiveness of quantity demanded or quantity supplied to one of its determinants The Price Elasticity of Demand and its Determinants: 1. The law of demand states that a fall in the price of a good raises the quantity demanded 2. Price elasticity of demand: a measure of how much the quantity demanded of a good responds to a change in the price of that good, computed as the percentage change in quantity demanded divided by the percentage change in price 3. Elastic if the quantity demanded responds substantially to changes in the price 4. Inelastic is the quantity demanded responds only slightly to changes in the price 5. The elasticity reflects the many economic, social and psychological forces that shape consumer tastes 6. General rules about what determines the price elasticity of demand: 1. Availability of close substitutes:
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