## 11 terms

### Elasticity

A measure of how much one economic variable responds to changes in another economic variable

### Price Elasticity of demand

the responsiveness of the quantity demanded to a change in price, measured by dividing the precentage change in quantity demanded of a product by the percentage change in the product's price

### Elastic demand

demand is elastic when the percentage change in quantity demanded is greater than the percentage change in price, so the price elasticity is greater than 1 in absolute value.

### inelastic demand

demand is inelastic when when the percentage change in quantity demanded is less than the percentage change in price, so the price elasticity is less than 1 in absolute value.

### unit-elastic demand

demand is unit-elastic when the percentage change in quantity demanded is equal to the percentage change in price, so the price elasticity is equal to 1 in absolute value.

### perfectly inelastic demand

the case where the quantity demanded is completely unresponsive to price, and the price elasticity of demand equals zero.

### perfectly elastic demand

the case where the quantity demanded is infinitely responsive to price, and the price elasticity of demand equals infinity.

### total revenue

the total amount of funds received by a seller of a good or service, calculated by multiplying price per unit by the number of units sold.

### cross-price elasticity of demand

the percentage change in quantity demanded of one good divided by the percentage change in the price of another good.

### income elasticity of demand

a measure of the responsiveness of the quantity demanded to changes in income, measured by the percentage change in quantity demanded divided by the percentage change in income.