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7 Cards in this Set

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  • Back
Price elasticity of demand
a measure of the responsiveness of quantity demanded to change in price
Elastic demand
the percentage change in quantity demanded is greater than the percentage change in price. quantity demanded changes proportionately more than price changes
Inelastic demand
the percentage change in quantity demanded is less than the percentage change in price. quantity demanded changes proportionately less than price changes
Unit elastic demand
the percentage change in quantity demanded is equal to the percentage change in price. quantity demanded changes proportionately to price changes
Perfectly elastic demand
a small percnetage change in price causes an extremely large percentage change in quantity demanded (from buying all to buying nothing)
Perfectly inelastic demand
quantity demanded does not change as price changes
Price elasticity of supply
a measure of the responsiveness of quantity supplied to changes in price