# Study sets matching "microeconomics elasticity"

Study sets

Diagrams

Classes

Users

Elasticity formula

Elasticity Measures

Elasticity of Demand

Elasticity of Supply

Mid-Point Formula

How responsive is the dependent variable to the independent va…

Own Price; [% Change in Q/ % Change in P]... Decrease/Increase

% Change in Qs/ % Change in P... Increase/Increase

Elasticity formula

Mid-Point Formula

Elasticity Measures

How responsive is the dependent variable to the independent va…

Law of demand and price elasticity of d…

How do you calculate elasticity?

What is the midpoint rule?

What are the categories of elasticity?

- As price goes up, quantity demanded goes down.... - When the pr…

% changes are an average of starting and ending values

- Elastic Demand: ED > 1 leads to % ΔQD > % ΔP... - Inelastic Dem…

Law of demand and price elasticity of d…

- As price goes up, quantity demanded goes down.... - When the pr…

How do you calculate elasticity?

Price elasticity of demand

Midpoint Method

Perfectly inelastic demand

Perfectly elastic demand

The ratio of the percent change in the quantity of the percent…

A technique for calculating the percent change. In this approa…

The case in which the quantity demanded does not respond to pr…

The case in which any price increase causes the quantity deman…

Price elasticity of demand

The ratio of the percent change in the quantity of the percent…

Midpoint Method

A technique for calculating the percent change. In this approa…

price responsiveness (unresponsive)

price elasticity of demand

Formula for price elasticity of demand

Larger the price elasticity of demand

a large increase in the price leave the quantity demanded by a…

the ratio of the percent change in the quantity demanded to th…

% change in quantity demanded / % change in price

More responsive to a change in price = more elastic

price responsiveness (unresponsive)

a large increase in the price leave the quantity demanded by a…

price elasticity of demand

the ratio of the percent change in the quantity demanded to th…

Inelastic demand

Elastic demand

Formula for computing demand elasticity

Perfectly inelastic demand

- Quantity demanded is very unresponsive to changes in price... -…

- Quantity demanded is very responsive to a change in the prod…

(change in quantity demanded ÷ average quantity demanded) ÷ (c…

- Occurs when a change in price leads to no change in quantity…

Inelastic demand

- Quantity demanded is very unresponsive to changes in price... -…

Elastic demand

- Quantity demanded is very responsive to a change in the prod…

Elasticity

Price Elasticity of Demand

Elastic Demand

Inelastic Demand

A measure of how responsive one variable is to a change in ano…

A measure of how responsive quantity demanded is to a change i…

Price elasticity of demand greater than the absolute value of…

Price elasticity of demand less than the absolute value of 1;…

Elasticity

A measure of how responsive one variable is to a change in ano…

Price Elasticity of Demand

A measure of how responsive quantity demanded is to a change i…

Elasticity of demand =

INTERPRET: elastic

INTERPRET: Unit Elasticity

INTERPRET: inelastic

change in price and how that impacts quantity demanded (% chan…

Over 1 (>1)

Equal to one (=1)

Under 1 (<1)

Elasticity of demand =

change in price and how that impacts quantity demanded (% chan…

INTERPRET: elastic

Over 1 (>1)

elasticity

price elasticity of demand

price elastic

price inelastic

the percentage change of one variable due to a change in anoth…

the percentage responsiveness of quantity demanded due to chan…

the percentage change in quantity demanded is more than propor…

the percentage change in quantity demanded is less than propor…

elasticity

the percentage change of one variable due to a change in anoth…

price elasticity of demand

the percentage responsiveness of quantity demanded due to chan…

PED (Price Elasticity of Demand)

PED (equation)

Perfectly Inelastic

Inelastic

the degree of responsiveness of the quantity demanded of a pro…

% change in Qd / % change in P

consumers are willing and able to buy the same quantity regard…

the change in price will lead to a proportionally smaller chan…

PED (Price Elasticity of Demand)

the degree of responsiveness of the quantity demanded of a pro…

PED (equation)

% change in Qd / % change in P

Law of Demand

Demand Curves

Price Elasticity of Demand

Price Elasticity of demand is measured…

The rule that, holding everything else contents, when the pric…

A curve that shows the relationship between the price of a pro…

The responsiveness of the quantity demanded to a change in pri…

dividing the percentage change in the quantity demanded of a p…

Law of Demand

The rule that, holding everything else contents, when the pric…

Demand Curves

A curve that shows the relationship between the price of a pro…

Price elasticity of demand (PED)

What do elasticity figures tell us?

Factors that influence PED

Number of close substitutes within the…

Measures the responsiveness of quantity demanded to a change i…

Zero = totally inelastic (completely unresponsive to price cha…

Number of close substitutes within the market, luxuries and ne…

The more close substitutes available in a market, the more ela…

Price elasticity of demand (PED)

Measures the responsiveness of quantity demanded to a change i…

What do elasticity figures tell us?

Zero = totally inelastic (completely unresponsive to price cha…

Elasticity

Elasticity =

Price elasticity of demand

Percent change in Quantity demanded = (…

A measure of how responsive one variable is to a change in ano…

% change in quantity / % change in price

A measure of how responsive quantity demanded is to a change i…

(Q2-Q1)... ___________ x 100... Q1

Elasticity

A measure of how responsive one variable is to a change in ano…

Elasticity =

% change in quantity / % change in price

What does

**elasticity measure**?What is

**Inelastic Demand**?How does the

**Inelastic Curve**look lik…For

**inelastic demand**what happens whe…**Elasticity**is a measure of consumer responsiveness to a chan…

Quantity is

**in**sensitive to a change in priceThe

**inelastic curve**is steep.If price increases, quantity demanded will fall a little.

What does

**elasticity measure**?**Elasticity**is a measure of consumer responsiveness to a chan…

What is

**Inelastic Demand**?Quantity is

**in**sensitive to a change in pricePrice Elasticity of Demand

Larger Price of Elasticity of Demand

Midpoint method

Perfectly Inelastic Price of Demand

Ratio of the percent change in the quantity demanded to the pe…

More responsive the quantity demanded to the price

Technique for calculating the percent change by calculating ch…

When the quantity demanded does not respond at all to changes…

Price Elasticity of Demand

Ratio of the percent change in the quantity demanded to the pe…

Larger Price of Elasticity of Demand

More responsive the quantity demanded to the price

Price elesticity of demand

Price elasticity formula

Unit elasticity

Elastic demand

The responsiveness of consumers to a price change

Change in quantity demanded/ original quantity demanded •\• ch…

When the amount demanded & change of price percentages are the…

Modest price change causes large changes in quantity purchased

Price elesticity of demand

The responsiveness of consumers to a price change

Price elasticity formula

Change in quantity demanded/ original quantity demanded •\• ch…

Microeconomics

Demand

Demand Schedule

Demand Curve

The behavior of individuals and firms in making decisions rega…

The quantity of a good or service consumers are willing able t…

Lists the quantities demanded at each price

Shows the demand schedule plotted on a graph... Price=y-axis... Quan…

Microeconomics

The behavior of individuals and firms in making decisions rega…

Demand

The quantity of a good or service consumers are willing able t…

Microeconomics

Demand

Demand Schedule

Demand Curve

The behavior of individuals and firms in making decisions rega…

The quantity of a good or service consumers are willing able t…

Lists the quantities demanded at each price

Shows the demand schedule plotted on a graph... Price=y-axis... Quan…

Microeconomics

The behavior of individuals and firms in making decisions rega…

Demand

The quantity of a good or service consumers are willing able t…

What is utility?

What is the Law of Diminishing Utility?

What is Utility Maximization?

What is a Util?

The satisfaction gained from consuming a good

As consumption increases, the marginal utility obtained from e…

Consumer allocates her income so that the last dollar spent on…

One unit of satisfaction

What is utility?

The satisfaction gained from consuming a good

What is the Law of Diminishing Utility?

As consumption increases, the marginal utility obtained from e…

Elasticity

Three Measures of Elasticity

Price Elasticity of Demand

Elasticity of Demand > 1

A measure of how sensitive one variable is to changes in anoth…

1. Price elasticity of demand... 2. Cross-price elasticity of dem…

How much does the quantity demanded change when the goods pric…

Elastic

Elasticity

A measure of how sensitive one variable is to changes in anoth…

Three Measures of Elasticity

1. Price elasticity of demand... 2. Cross-price elasticity of dem…

Price Elasticity of Demand

Elastic Demand (

**relatively elastic**)Unit Elasticity of Demand (*unitary ine…

Inelastic Demand (*relatively inelastic…

the responsiveness of the quantity demanded of a commodity to…

a demand relationship in which a given percentage change in pr…

a demand relationship in which the quantity demanded changes e…

a demand relationship in which a given percentage change in pr…

Price Elasticity of Demand

the responsiveness of the quantity demanded of a commodity to…

Elastic Demand (

**relatively elastic**)a demand relationship in which a given percentage change in pr…

What is elasticity?

Why is price elasticity of demand alway…

elastic demand < 1

elastic demand > 1

it measures the responsiveness to one variable to changes in a…

always negative because it is sloping downward ... -use absolute…

it is inelastic ... -when price changes a lot quantity demanded c…

it is elastic... -when price changes a little quantity demand cha…

What is elasticity?

it measures the responsiveness to one variable to changes in a…

Why is price elasticity of demand alway…

always negative because it is sloping downward ... -use absolute…

Elasticity

Price elasticity of Demand

Elastic

Inelastic

How responsive the market is to a change in any condition

(%change in Quantity Demanded)/(%change in Price)

Ep is greater than 1

Ep is less than 1

Elasticity

How responsive the market is to a change in any condition

Price elasticity of Demand

(%change in Quantity Demanded)/(%change in Price)

Price elasticity of demand (PED)

PED Equation

Price elastic demand

Price inelastic demand

the measure and the responsiveness of the quantity demanded of…

PED = % change in Qd (quantity demanded) / % change in P (pric…

PED >1 this means that a small percentage change in price caus…

0<PED<1 this means that a large percentage change in price cau…

Price elasticity of demand (PED)

the measure and the responsiveness of the quantity demanded of…

PED Equation

PED = % change in Qd (quantity demanded) / % change in P (pric…

perfectly inelastic demand

unit elastic demand

inelastic demand

perfectly elastic demand

if the quantity demanded remains constant when the price chang…

if the percentage change in quantity demanded equals the perce…

the price elasticity of demand is between zero and 1

if the quantity demanded changes by an infinitely large percen…

perfectly inelastic demand

if the quantity demanded remains constant when the price chang…

unit elastic demand

if the percentage change in quantity demanded equals the perce…

Elasticity of Demand

Elasticity Formula

Inelastic Demand

Perfectly Elastic Demand Curve

Measures the change in quantity demanded in response to a chan…

Ep = Percentage change in quantity demanded/Percentage change…

A demand relationship in which a given percentage change in pr…

A perfectly horizontal demand curve; the firm can sell as much…

Elasticity of Demand

Measures the change in quantity demanded in response to a chan…

Elasticity Formula

Ep = Percentage change in quantity demanded/Percentage change…