Term

Definition
A measure of responsiveness to changes in prices or income. 


Term
The importance of the Price Elasticity of Demand is: 

Definition
The measure of the responsiveness of DEMAND to income. 


Term
The significance of the Price Elasticity of Supply is a measure of: 

Definition
The responsiveness of the quantity supplied to price. 


Term
Income Elasticity of Demand is: 

Definition
A measure of the responsiveness of demand to income. 


Term
The Price Elasticity of Supply measures: 

Definition
The responsiveness of the quantity supplied to price. 


Term

Definition


Term
The Price Elasticity of Demand is the ratio of the: 

Definition
Percentage in the quantity demanded to the percent change in the price (as we move along the demand curve). 


Term
The midpoint method is a technique for calculating: 

Definition


Term
The Price Elasticity of demand is equal to the percent change in the quantity demanded divided by: 

Definition
The percent change in the price as you move along the demand curve. 


Term
PErcent changes are best measured using the _________ method. 

Definition


Term
The midpoint (method) is calculated by: 

Definition
Quantity demanded divided by the percent change in the price. 


Term
Demand is Perfectly ELASTIC when: 

Definition
Any price increase will cause the quantity demanded to drop to zero. 


Term
When demand is perfectly inelastic, the demand curve is a _________ line. 

Definition


Term
Demand is Perfectly ELASTIC when any price increase will cause the: 

Definition
Quantity demanded to drop to zero. 


Term
When demand is perfectly ELASTIC, the demand curve is a ____________ line. 

Definition


Term

Definition
The price elasticity of demand is GREATER than 1. A fall in price increases total revenue. 


Term

Definition
The price elasticity of demand is less than 1. A fall in price reduces total revenue. 


Term
Demand is unitelastic if: 

Definition
The price elasticity of demans is exactly 1. A fall in price has no effect on total revenue. 


Term

Definition
The total value of sales of a good or service. 


Term
Total revenue is equal to: 

Definition
The price multiplied by the quantity sold. 


Term
When a seller raises the price of a good, two countervailing effects are present: 

Definition
Price and Quantity Effect. 


Term

Definition
After a price increase, each unit solf sells at a higher price, which tends to raise revenue. 


Term

Definition
After a price increase, fewer units are sold, which tends to LOWER revenue. 

