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16 Cards in this Set
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 Back
Define Price Elasticiy of Demand.

measures how much the quantity changes when its price changes


What is the equation for Price Elasticity of Demand?

%change in quantity demanded
_____________________________ % change in price 

What is the equation for Tottal revenue?

Price * Quantity = TR


If E is greater than one that price is....?

Elastic


If price is Elastic quantity is....?

moving more quickly than price & increases revnues


If E is less than one price is...?

inelastic


If price is inelastic then quantity is...?

moving slower than price and there is a decrease of revenue


If E is equal to one then price is...?

perfectly elastic


If price is perfectly elastic then...?

It is a straight line


on a linear demand curve the mid point is...?

unitary elastic


On a linear demand curve any point above the midpoint is...?

elastic


On a linear demand curve any point below the midpoint is...?

inelastic


E>1

P X Q = TR
↑ ↓ ↓ ↓ ↑ ↑ 

E<1

P X Q = TR
↑ ↓ ↑ ↓ ↑ ↓ 

E=1

P X Q = TR
↑ ↓  ↓ ↑  

Which factors have an influence on Elasticity?

More elastic Less elastic
more substitutes less subs. luxury necessity more time short time 