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Chapter 4

ECN 104 Chapter Notes - Chapter 4: Demand Curve, Negative Number, Petro-Canada


Department
Economics
Course Code
ECN 104
Professor
Ingrid L.Stefanovic
Chapter
4

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

 !"#$%
&!"%#$%
$$$'%$('$%#$%%)$%*+*,
-'how much%!('$%#$%%$.$!$!$.$/
.*'#'of responsiveness of Quanty to a change in price, or..
How much does Quanty “stretch” when Price changes
PED0#'!"!$*$!"1'),!$.$!"2!3
Price Elascity of Demand Coecient
4$!$%strongly !$.$%#$%elasc
4$!$%weakly!$.$%#$%inelasc
The Price Elascity Coecient and Formula
"('$%#$%% increased"!#!5'$$.$.
&!'%1
67%07%890:; 99056
"('$%#$%%%!%"!#5!$.$.&!'%1
6707%890 85; 99096
4$.$.$%%!&'/56!96/
!*!%!$"'!$1!'$%$%!$&'*.$.$%$%
*.$.$
Price Elascity of Demand Formula

Only pages 1-3 are available for preview. Some parts have been intentionally blurred.

The Price Elascity Coecient
!"%#$%
o$.
$"#')&$!#<"&'$$!%!,
!!#!$*$!!%'
o#$#$'.$
!!#
!=$&&1$.*$'#11>('$
$*%
3!=$&&1!*$'#11!*%
Interpretaon of Elascity of Demand
%? %#$%
)6$.$?$6$.$,
%0 %#$%'$
)6$.$06$.$,
%@ %#$%$
)6$.$@$6$.$,
;#
o"$%#$%09)*$,
$%!$!$.
o"%#$%0$A$
$'%#$.$
4$!=$.$ #$$.$.$
('$%#$%%.$$.$.$)1%!$"!#',
$%$.!$'#$*!$.$!%#$%
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"$$%"#$%
;#'!$%
"$%#$%$%
*%#$%'*&!'%
1*$%.$
!*;
!=$9$;#
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1%1B%#$%"!$'$

Only pages 1-3 are available for preview. Some parts have been intentionally blurred.

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"$$%"#$%
4.2 The Total-Revenue Test
!*$'),!#!'$*"!#!"!%')!
*,$'#!%
o0;
$%%%
o"$.$!!%!$"!#%#$%elasc)$.
C<D1'$.C!D,
o"$.$#%!$"!#%#$%inelasc)$.C
!D1'!$C<D,
o"%!$!$.&$$.%#$%unit elasc
.'+
!+*$'"!
;#'!$$&#
%'!$&!'%'1'!$
'"!#E!!!1!
!1$"%#$%$%
%#$%'*&!'%1!E!$
!=$$A$$;#!"
"%#$%A#B%#$%
'*$'!#*$%'&!
'$1!$.
!&$%%#$%
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