ECON101 Lecture Notes - Lecture 3: Demand Curve, Inferior Good

• School: University of Waterloo
• Department: Economics
• Course: ECON101
• Professor: Zara Liquat

Document Summary

Objectives: de ne and calculate price elasticity of demand inelastic, inelastic, unit elastic, elastic, and perfectly elastic. List the factors that in uence price elasticity of a good or service. Explain variations of price elasticity of supply speci cally, when supply is perfectly inelastic, unit elastic, elastic, and perfectly elastic. List the factors that in uence price elasticity of supply of a good or service. Elasticity = measures how a change in one variable a ects another variable. = measures how responsive demanders are to a change in the price of good or svc. = measure of the responsiveness of the quantity demanded of a gd/cvs to a change in its price, when all other in uences on buyer"s plans remain unchanged. = price change in qty demanded/percentage change in price. = denotes as ed in this course not the slope of the demand curve because slope changes when units change.