ECON 202 Lecture Notes - Lecture 5: Negative Number
Document Summary
One variable changing in relation to another variable changing. Price elasticity of demand: a measure of the responsiveness or sensitivity of. Formula: ed = (% x in qd / % x in price) Ex: if tuition increase by 10% that cause enrollment to drop by 20%. Since qd and p always change in opposite directions then the numerator and denominator will always have opposite signs (+/-) so we often ignore the negative sign when discussing ed. % change in x = (newer value-older value / older value) x 100. Ex: suppose a university raises tuition from a semester to a semester. This causes enrollment to drop from 10,000 to 9,000. Trip rule= total revenue always changes in the same direction as price for. Factors affecting the price elasticity of demand.