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11 Cards in this Set
- Front
- Back
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Elasticity
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a measure of responsiveness to changes in prices and incomes, typically measured in precent change.
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Price elasticity of demand
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the responsiveness of the demand curve in response to changes in price
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Midpoint method
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technique for calculating the percent change
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Perfectly elastic
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when a price increase will result in the demand going to zero, represented by a horizontal demand curve.
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Perfectly inelastic
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when quantity demand does not at all respond to a change in price, represented by a vertical demand curve.
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Elastic
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good with a price elasticity of demand of above 1
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Inelastic
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a good with a price elasticity of demand of below 1
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Unit elastic
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a price elasticity of demand of 1.
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Cross price elasticity of demand
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measures the change of one goods price's result on the quantity of another.
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Income elasticity of demand
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a measure of the responsiveness of the demand curve to changes in income
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Price elasticity of supply
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a measure of the responsiveness of the supply curve to changes in price
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