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5 Cards in this Set
- Front
- Back
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elasticity of demand depends on
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The availability of close substitutes
The proportion of income spent on the good The amount of time people have to to adapt to a price change. Luxury vs. necessity. |
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Closer Substitutes
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HIgher elasticity
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When demand price is elastic
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total revenue follows quantity
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when demand price is inelastic
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total revenue follows price
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Tax Burden
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if E d is less then E s tax burden falls on consumers
if E d is greater than E s tax burden falls on sellers |
