Question

What is the formula for calculating elasticity?

Solution

Verified
Step 1
1 of 2

The basic idea of elasticity is how a percentage change in one variable causes a percentage change in another variable.

Elasticity of variable 1 with respect to variable 2=% change in variable 1% change in variable 2\text{Elasticity of variable 1 with respect to variable 2}=\dfrac{\text{\% change in variable 1}}{\text{\% change in variable 2}}

Midpoint Method is used to calculate point elasticity between two points whether there is a variable increase or decrease. This formula uses the same base for both cases.

Create an account to view solutions

By signing up, you accept Quizlet's Terms of Service and Privacy Policy
Continue with GoogleContinue with Facebook

Create an account to view solutions

By signing up, you accept Quizlet's Terms of Service and Privacy Policy
Continue with GoogleContinue with Facebook

Recommended textbook solutions

Principles of Macroeconomics 6th Edition by N. Gregory Mankiw

Principles of Macroeconomics

6th EditionISBN: 9780538453066 (7 more)N. Gregory Mankiw
436 solutions
Principles of Economics 8th Edition by N. Gregory Mankiw

Principles of Economics

8th EditionISBN: 9781305585126 (1 more)N. Gregory Mankiw
1,337 solutions
Cambridge IGCSE Business Studies 4th Edition by Karen Borrington, Peter Stimpson

Cambridge IGCSE Business Studies

4th EditionISBN: 9781444176582Karen Borrington, Peter Stimpson
467 solutions
Principles of Microeconomics 1st Edition by OpenStax, Steven Greenlaw, Timothy Taylor

Principles of Microeconomics

1st EditionISBN: 9781938168246OpenStax, Steven Greenlaw, Timothy Taylor
713 solutions

Related questions