ECON 1000 Study Guide - Final Guide: Normal Good, Inferior Good
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ECON 1000 Full Course Notes
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Econ1000 lecture 6 chapter 4: elasticity price elasticity of demand. Calculating price elasticity of demand (% change in quantity demanded / % change in price) x 100 = ____% Demand can be inelastic, unit elastic, elastic, and can range from 0 to infinity. Unit (unitary) elastic: e = 1 elastic: e > 1. Revenue change: price change and/or quantity change if: E > 1 (elastic), then revenue change > 0, when price change < 0. E = 1 (unit elastic), then revenue change = 0, when price change < 0 or price change > E < 1 (inelastic), then revenue change < 0 when price change < 0. A method of estimating the price elasticity of demand by observing the change in total revenue that results from a price change (when all other influences on the quantity sold remain the same). The factors that influence the elasticity of demand. The elasticity of demand for a good depends on: