Economics 1021A/B Chapter Notes - Chapter 4: Demand Curve, Negative Number, Normal Good
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ECON 1021A/B Full Course Notes
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Percentage change in quantity demanded / percentage change in price (change in price / average price) / (change in quantity / average quantity) Elastic and inelastic demand: perfectly inelastic when ratio = 0, this is a horizontal demand curve (e. g insulin for diabetics) vertical demand curve, unit elastic demand = 1 (curved) Inelastic demand if when the ratio is between 0 and 1, food and shelter are examples of this. If quantity demanded changes infinitely compared to a tiny price change, then the elasticity is said to be perfectly elastic demand. This is very common when the demand for a good has a perfect substitute. Such as two vending machines side by side (horizontal: price elasticity of demand that is greater than one is said to be elastic. Automobiles and furniture are said to be elastic goods. The factors that influence the elasticity of demand.