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### 20 Cards in this Set

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 arc elasticity Average elasticity over a given range of a function complements Products that are inversely related in terms of price and quantity countercyclical Inferior goods whose demand falls with rising income, and rises with falling income cross-price elasticity Responsiveness of demand for one product to changes in the price of another cyclical normal goods Products for which demand is strongly affected by changing income elastic demand Situation in which a price change leads to a more than proportionate change in quantity demanded elasticity Percentage change in a dependent variable resulting from a 1 percent change in an independent variable endogenous variables Factors controlled by the firm exogenous variables Factors outside the control of the firm income elasticity Responsiveness of demand to changes in income, holding constant the effect of all other variables inelastic demand Situation in which a price change leads to a less than proportionate change in quantity demanded inferior goods Products with sales that rise when income falls market demand curve Total amount of a specific good or service customers are willing to buy at various prices under present market conditions noncyclical normal goods Products for which demand is relatively unaffected by changing income normal goods Products with sales that rise when income increases optimal price formula For any downward-sloping demand curve, maximum profits result when P = MC/ [1 + (1/´P)] point elasticity Elasticity at a given point on a function price elasticity of demand Responsiveness of the quantity demanded to changes in the price of the product, holding constant the values of all other variables in the demand function substitutes A direct relation between the price of one product and the demand for another product unitary elasticity Situation in which price and quantity changes exactly offset each other