Term
| Price elasticity of demand |
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Definition
| ratio of the percent cahnge in the quantity demanded to the percent change in the price as we move along the dmeand curve(dropping the minus sign). |
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Term
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Definition
| Is a technique for calcualting the percent change, in this approach, we calcualte cahnges in a variable compared with the average, or midpoint, of the starting and final values. |
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Term
| perfectly inelastic demand |
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Definition
| Demand is perfectly inelastic when the quantity demanded does not respond at all to changes in the price, when demand is perfectly ineslatic, the demand curve is a vertical line. |
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Term
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Definition
| Demand is perfetly elastic when any price increase will cause the quantity demanded to drop to zero. When demand is perfectly elastic, the demand curve is a horizontal line. |
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Term
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Definition
| If the price elasticity of demand is exactly 1 |
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Term
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Definition
| Demand is elastic when price elasticity is greater than 1 |
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Term
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Definition
| if the price elasticity of demand is less than 1 |
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Term
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Definition
| The total revenue is the revenue of sales of ag ood or service. it is equal to the price multiplied by the quantity sold. |
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Term
| cross price elasticity of demand |
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Definition
| Between two goods measure the effect of the change in one goods price in hte quantity demanded of the other good. It is equal to teh percent change in the quantity demanded of one good divided by the percent change in the pother good's price. |
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Term
| Income elasticity of demand |
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Definition
| Is the percent change in the quantity of a good demanded whrn a consumer's income changes divided by the percent change in the consumers income. |
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Term
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Definition
| The demand for a good is income elastic if the income of elasticity of demand for that good is greater then 1 |
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Term
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Definition
| The demand for a good is income inelastic if the income of elasticity of demand for that good is positive but less than 1 |
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Term
| Price elasticity of supply |
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Definition
| Is a measure of the responsiveness of the quantity of a good supplied to the price of that good, its the ratio of the percent of that good. It is the ratio of the percent change in the quantity supplied to the percent change in the price as we move along the supply curve. |
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Term
| perfectly inelastic supply |
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Definition
| when the price elasticity of supply is zero, so that changes in the price of the good have no effect on the quantity supplied. A perfectly inelastic supply curve is a vertial line. |
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Term
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Definition
| There is perfetly elastic supply when even a tiny increase or reduction in the price will lead to very large changes in the quantity supplied, so that the price elasticity of supply is infinite. A percetly elastic supply curve is a horizontal line. |
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