EC 201 Lecture Notes - Lecture 7: Demand Curve

55 views2 pages
2 Oct 2017
School
Department
Course
Professor

Document Summary

The price of elasticity of demand measures the responsiveness of quantity demanded to a change in price. =precentage change in quantity demanded / percentage change in price. Where percentage change in quantity demanded = deltaq/q. Suppose the % change in price is +10. The % change in quantity demanded is -5. Therefore the ped = -5/10 = -0. 5. Suppose your economist tells you that the price elasticity of demand for. It allows us to play what if games the product you sell is -2. 5. And suppose there is a forecasted price increase of 2% because of a decrease in labor available. Then it follows that you can expect a 5% decrease in the quantity demanded. Mathematically: -2. 5 = (-5/2) or 2 x -2. 5 = -5 from the formula. In other words, consumers are relatively responsive to price changes. In other words, consumers are relatively unresponsive to price changes. The price elasticity for a given good equals |1|

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 Documents

Related Questions