ECON 202 Lecture Notes - Lecture 10: Demand Curve, Negative Number, Normal Good
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Econ 202: principles of microeconomics - lecture 10: elasticity: the responsiveness of. Elasticity: a measure of how much one economic variable (such as quantity demanded or supplied) responds to changes in another economic variable (such as price). This allows business managers and policymakers to calculate the responsiveness of the quantity of a product demanded or supplied when the price changes. Price elasticity of demand: the responsiveness of the quantity demanded to a change in price, measured by dividing the percentage change in the quantity demanded of a product by the percentage change in the product"s price. Price elasticity of demand must be measured using percentage changes. This is so because percentage changes do not depend on specific units of measurement (i. e. dollars, cents, etc ). Price elasticity of demand = percentage change in quantity demanded percentage change in price. Price elasticity of demand is not the same thing as the slope of the demand curve.