ECO 1104 Lecture Notes - Lecture 5: Allday, Demand Curve, Negative Number
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7 Nov 2017
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Recall the law of demand: as p increases (decreases), qd decreases (increases) The ped is defined as the % change in qd divided by the % change in p (delta qd/qd)/(delta p/p: related to the scope of the d curve, but it is not the same thing. By rearranging that equation, one can express it as. [1/(delta p/delta qd)] * (p/qd: the bases values are averages. By constructions, it is unit-less: the price is in $, and it cancels, as do the units for the quantity variable. You will always obtain a negative number for the ped, which is due to the law of demand: then, by convention, take the absolute value of it. If the qd remains constant regardless of price, the good has a perfectly inelastic demand. No: cable television, why does rogers cable television engage in such obnoxious marketing practices, prescription drugs, cigarettes.
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