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The laws of demand and supply predict the direction of changes in equilibrium price and quantity in response to various shifts in demand and supply. 4. 1 pr ice e lastici ty of de mand. demand is said to be elastic when quantity demanded is quite responsive to changes in price. When quantity demanded is relatively unresponsive to change in price, demand is said to be inelastic. The more responsive the quantity demanded is to changes in price, the less the change in equilibrium price and the greater the change in equilibrium quantity from any given shifts in the supply curve. The slope of a demand curve tells us the amount by which price must change to cause a unit change in quantity demanded. If initial prices and quantities are the same in both cases, the larger absolute change is also the larger percentage change.

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