ECON 1100 Lecture Notes - Lecture 5: Feta, Demand Curve
23 Sep 2015
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Graph: find intercepts a. b. c. d. Price elasticity of demand: a measure of responsiveness of quantity demanded to a change in the commodity"s price. Has to do with the slope of the demand curve. Therefore, the steeper the demand curve the less responsive it is. For the same shift of the supply curve, da is relatively elastic; db is relatively inelastic. Tshirt reduction in price increase in q demanded. Increase in price means positive denominator, negative numerator. Error in textbook for this according to professor. 0. 125 (plug all the numbers into equation and solve) Numerator percentage change in quantity, denominator is percentage change in price. If eta is 0 it is perfectly or completely inelastic: between 0 and 1 inelastic, 1 unit elastic, greater than 1 elastic e. Infinity perfectly or completely elastic: not constant in a linear demand curve.
