L11 Econ 1011 Lecture 4: Chapter 4
22 views1 pages
Document Summary
If demand is inelastic, then price increase raises total revenue. Income elasticity of demand percentage by which demand changes in response to a 1 percent change in income: owned price elasticity of demand only having to do with single thing, elastic demand is price-sensitive. Inelastic demand is not very price-sensitive: price elasticity of supply, a straight line supply curve that passes through origin will have unit elasticity at all points (e=1, determinants of supply elasticity, flexibility of inputs. If it is the case where supplier wants to increase quantity supplied, the more flexible the inputs are the better off supplier is: mobility of inputs. If difficult to bring anything in quickly then cannot change quantity of supply quickly: ability to use substitute inputs, time. If alternative inputs are easy to find then more elastic.
Get access
Grade+
$40 USD/m
Billed monthly
Homework Help
Study Guides
Textbook Solutions
Class Notes
Textbook Notes
Booster Class
10 Verified Answers
Class+
$30 USD/m
Billed monthly
Homework Help
Study Guides
Textbook Solutions
Class Notes
Textbook Notes
Booster Class
7 Verified Answers