Term
Price Elasticity of Demand 

Definition
the ratio of the percent change in quantity demanded to the percent change in the price in a demand curve. 


Term

Definition
a technique for calculating the percent change. in this approach, we calculate changes in a variable composed with the average or. midpoint, of the starting and final values 


Term
perfectly inelastic demand 

Definition
exists when the quantity demanded does not respond at all to the changes in the price. When demand is perfectly inelastic the demand curve is a vertical line. 


Term

Definition
when any price increases will cause the quantity demanded to drop to zero when demand is perfectly elastic, the demand curve is a horizontal line. 


Term

Definition
exists when the price elasticity of demand is greater than one (inelastic if the price of demand is less than one, and unitelastic if the price elasticity of demand is exactly one. 


Term

Definition


Term

Definition
total value of sales of goods/services= the price multiplied by the quantity sold. 


Term
CrossPrice Elasticity of Demand 

Definition
between two goods measures the effect of the change in ones goods price on the quantity demanded of the other good. it is equal to the percent change in the quantity demanded of one good divided by the percent change in the other goods price. 


Term
Income elasticity of Demand 

Definition
the percent change in the quantity of a good demanded when a consumer income changes divided by the percent change in the consumers income. 


Term
Price elasticity of supply 

Definition
is a measure of the responsiveness of the quantity of a good supplied to the price 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. 


Term
perfectly inelastic supply 

Definition
exists 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 vertical line. 


Term

Definition
exists when a small increase or reduction in the price leads to a very large change in the quantity supplied, so that the price elasticity of supply is the infinite. a perfectly elastic supply curve is a horizontal line. 

