ECON-UA 2 Lecture Notes - Lecture 7: Delaware Route 1, Deadweight Loss, Demand Curve

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scarletlion171

3 Oct 2016

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Sensitivity of one market variable to another. Slope = change in p/ change in quantity demanded. Not a measure of price sensitivity of demand. Depends on the arbitrary units of measurement. Doesn"t tell us the significance of change in p or change in quantity demanded. Percentage change in quantity demanded caused by a 1 percent change in price. Because the demand curve is downward sloping, the price elasticity is negative. The greater the elasticity value the more sensitive quantity demanded is to price. Elasticity of demand = %change in quantity demanded/ % change in price. Midpoint formula, percentage change in a variable. Change in the variable divided by the average of the old and new values. When calculating elasticity values from data on prices and quantities. % change in quantity demanded = q1-q0/ (q1+q0/2) If the price of avocados goes down from . 50 to . 00, the percent change in price is sh. 50/. 25= 0. 40 or 40%.

Related Questions

interval (or arc) elasticity

cross-price elasticity

price elasticity of demand

elastic demand

income elasticity

inelastic demand

inframarginal units

marginal revenue

point elasticity

price effect

quantity effect

total revenue

unitary elastic demand

1. __________________ A measure of consumersâ sensitivity or responsiveness to changes in the price of a good or service.

2. ___________________ When the percentage change in price (in absolute value) is more than the percentage change in quantity demanded (in absolute value).

3. ___________________ When the percentage change in quantity demanded (in absolute value) is more than the percentage change in price (in absolute value).

4. ___________________ When the percentage change in quantity demanded (in absolute value) is just equal to the percentage change in price (in absolute value).

5. ___________________ Total amount paid to a producer for a good or service P * Q.

6. ___________________ The effect on total revenue of a change in price, holding quantity constant.

7. ___________________ The effect on total revenue of a change in quantity, holding price constant.

8. ___________________ An elasticity calculated over an interval of a demand curve or demand schedule.

9. ___________________ Elasticity at a specific price or point on a demand curve.

10. ___________________ A measure of how responsive quantity demanded is to a change in income, all other things constant.

11. ___________________ A measure showing how responsive the quantity demanded of one good is to changes in the price of another good, other factors constant.

12. ___________________ The additional revenue received by producing and selling one more unit of output.

13. ___________________ Units of output that could have been sold at a higher price had the firm not lowered its price to sell additional (marginal) units.

coffeehornet269

Which of the following statements about price elasticity of demand is false?

a) The value of price elasticity of demand is the reciprocal of the value of the demand curve's slope

b) If quantity demanded changes by a larger percentage than the percentage change in price, demand is elastic

c) The value of price elasticity of demand along a downward sloping demand curve is always negative

d) A linear downward sloping demand curve has a varying price elasticity coefficient

crimsonreindeer712

Which of the following statements about price elasticity of demand is false?
A) The value of the price elasticity of demand is the reciprocal of the value of the demand curve's slope.
B) If quantity demanded changes by a larger percentage than the percentage change in price, demand is elastic.
C) The value of the price elasticity of demand along a downward-sloping demand curve is always negative.
D) The elasticity is different on every point of a linear downward-sloping demand.

crimsonreindeer712

ECON-UA 2 Lecture Notes - Lecture 7: Delaware Route 1, Deadweight Loss, Demand Curve

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