ECO101H1 Lecture : Elasticity ...

52 views5 pages
16 Oct 2011
School
Department
Course
Professor
elizabethkandelaki and 40134 others unlocked
ECO101H1 Full Course Notes
98
ECO101H1 Full Course Notes
Verified Note
98 documents

Document Summary

Demand is said to be elastic when quantity demanded is responsive to changes in price. When quantity demanded is unresponsive to changes in price, demand is said to inelastic. Knowing the average price and average quantity is necessary to calculate elasticity. Price elasticity of demand ( ) a measure of the responsiveness of quantity demanded to a change in the commodity"s own price. This measure is called the price elasticity of demand/demand elasticity. The use of average price and quantity in computing elasticity. Averages are used to avoid the ambiguity caused by the fact that when a price or quantity changes, the change is a different percentage of the original value than it is of the new value. Because price and quantity demanded have a negative relationship, demand elasticity is a negative number, but elasticity is always treated as an absolute value.

Get access

Grade+20% off
$8 USD/m$10 USD/m
Billed $96 USD annually
Grade+
Homework Help
Study Guides
Textbook Solutions
Class Notes
Textbook Notes
Booster Class
40 Verified Answers
Class+
$8 USD/m
Billed $96 USD annually
Class+
Homework Help
Study Guides
Textbook Solutions
Class Notes
Textbook Notes
Booster Class
30 Verified Answers

Related textbook solutions

Related Documents

Related Questions