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Microeconomics
Elasticity
10
Economics
Undergraduate 1
06/04/2008

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Term
Elastic Demand
Definition
The percentage change in quantity demanded is greater than the percentage change in price. Quantity demanded changes proportionately more than price changes. >1
Term
Price Elasticity of Demand
Definition
a measure of the responsiveness of quantity demanded to changes in price
Term
Inelasticity of Demand
Definition
The percentage change in quantity demanded changes proportionately less than price changes
<1
Term
Unit Elastic Demand
Definition
The percentage change in quantity demanded is equal to the percentage change in price. Quantity demanded changes proportionately to price changes
=1
Term
Perfectly elastic Demand
Definition
a small percentage change in price causes an extremely large percentage change in quantity demanded( from buying all to buying nothing
Term
Perfectly inelastic demand
Definition
Quantity demanded does not change as price changes
Term
Total Revenue(TR)
Definition
Price times quantity sold
P*Q
Term
Cross Elasticity of Demand
Definition
Measures the responsiveness in quantity demanded of one good to changes in the price of another good
Term
Income Elasticity of Demand
Definition
Measures the responsiveness of quantity demanded to changes in income
Term
Price elasticity of supply
Definition
Measures the responsiveness of quantity supplied to changes in price
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