Textbook Notes (368,652)
Canada (162,033)
Economics (923)
ECN 104 (387)
Chapter 5

Chapter 5 - Elasticity & Its Application

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ECN 104
Tsogbadral Galaabaatar

Chapter 5ElasticityBasic idea Elasticity measures how much one variable responds to changes in another variableOne type of elasticity measures how much demand for your websites will fall if you raise your priceDefinition dsElasticity is a numerical measure of the responsiveness of Q or Qto one of its determinants Price Elasticity of Demand d Price elasticity of demand measures how much Q responds to a change in PPrice elasticity of demand equalsAlong a D curve P and Q move in opposite directions which would make price elasticity negative We will drop the minus sign and report all price elasticities aspositive numbers What determines price elasticity To learn the determinants of price elasticity we look at a series of examples Each compares two common goods In each exampleSuppose the prices of both goods rise by 20d The good for which Q falls the most in percent has th
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