Term
Price Elasticity of Demand 

Definition
A measure of the responsiveness of the quantity demanded to changes in price; equal to the absolute value of the percentage change in quantity demanded divided by the percentage change in price 


Term

Definition
The price elasticity of demand is greater than one, so the percentage change in quantity exceeds the percentage change in price 


Term

Definition
The price elasticity of demand is less than one so the percentage change in quantity is less than the percentage change in price 


Term

Definition
The price elasticity of demand is one, so the percentage change in quantity equals the percentage change in price 


Term
Perfectly inelastic Demand 

Definition
the price elasticity of demand is zero 


Term

Definition
The price elasticity of demand is infinite 


Term

Definition
The money a firm generates from selling its product 


Term
Income Elasticity of Demand 

Definition
A measure of the responsiveness of demand to changes in consumer income equal to the percentage change in the quantity demanded divided by the percentage change in income 


Term
CrossPrice elasticity of demand 

Definition
A measure of the responsiveness of demand to changes in the price of another good; equal to the percentage change in quantity demanded of one good (X) divided by the percentage change in the price of another good (Y) 


Term
Price elasticity of Supply 

Definition
A measure of the responsiveness of the quantity supplied to changes in price; equal to the percentage change in quantity supplied divided by the percentage change in price 


Term
Principle of Diminishing Returns 

Definition
Suppose output is produced with two or more inputs, and we increase one input while holding the other input or inputs fixed. Beyond some pointcalled the point of diminishing returnsoutput will increase at a decreasing rate 


Term
Perfectly Inelastic Supply 

Definition
The price elasticity of supply equals zero 


Term

Definition
The price elasticity of supply is equal to infinity 

