ECO101H1 Chapter Notes - Chapter 6: Demand Curve, Perfect Competition, Normal Good
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ECO101H1 Full Course Notes
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Doing without, alternate products: more elastic at higher prices, more inelastic at lower prices, perfectly elastic, elastic, inelastic, perfectly inelastic. Demand curve of a firm in perfect competition. Becomes more elastic as consumers have time to adjust to price change. Cross price elasticity of demand: cross-price elasticity of demand: effect of change in price of one good on quantity demanded of other good, positive if substitutes; negative if complements. Income elasticity of demand: income elasticity of demand: percentage change in quantity of good demanded when consumer"s income changes, positive for normal goods, negative for inferior goods\normal goods can be income-elastic or income-inelastic. Price elasticity of supply: price elasticity of supply: measure of responsiveness of quantity of good supplied to price of good, can be perfectly inelastic. A venue reaches capacity and cannot sell any more seats. Factors determining price elasticity of supply: availability of inputs, time.