ECON-E 201 Lecture 10: Economics Lecture Chapter 4 Elasticity
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Elasticity-mathematical relationship(you must believe that there is some kind of relation. Elasticity is looking at the percent change in quantity demanded. Price elasticity off demand-ratio of the percentage change in quantity demanded(the dependent variable/quantity on the top) Changing the beginning values using the midpoint formula. Ex:for example: suppose we are interested in the responsiveness of students going to school when tuition increases in price from ,000 to. Further suppose that we found that there was a quantity demanded of 20,000 at ,000 tuition and a quantity demanded of 18,000 at. Elastic demand-(|ed|>1): the demand of a good is greater then the price change in price. Inelastic demand-(|ed|)<1);demand is less than the percentage change. availability of substitutes: elasticity of demand is directly related to the availability of good substitutes for product. necessities, such as food or housing, that have poor substitutes.
