ECON 1 Lecture Notes - Lecture 2: Midpoint Method, Demand Curve
nicholascsci and 2 others unlocked
18
ECON 1 Full Course Notes
Verified Note
18 documents
Document Summary
Measure of the responsiveness of quantity demanded or quantity supplied. To a change in one of its determinants. How much the quantity demanded of a good responds to a change in the price of that good. Loosely speaking, it measures the price-sensitivity of buyers" demand. The midpoint is the number halfway between the start and end values. Percentage change = ((end value - start value) / midpoint ) x 100% Price elasticity of demand = % change in quantity demanded / % change in price. The flatter the demand curve, the greater the price elasticity of demand. If demand is elastic: price , tr . If demand is inelastic: price , tr . How much the quantity supplied of a good responds to a change in the price of that good. Loosely speaking, it measures sellers" price-sensitivity of that good. The flatter the supply curve, the greater the price elasticity of supply.