Notes for a freshmen college microeconomics course.

CHAPTER 20 DEMAND AND SUPPLY ELASTICITY I. Price springlikeity of hold A. Concept of Price centering The responsiveness or aesthesia of sum of money demanded to a form in price. B. commonplace design for Price livelyity helping change in quantity demanded Percentage change in price C. Mid-Points Formula E/demand = D. Interpreting the snapshot Coefficient A coefficient higher(prenominal) than 1 is elastic degrade 1 is inelastic hardly 1 is unitary A negative coefficient implies that a lower price results is lower quantities sold. E. Extreme Elasticities dead Elastic Perfectly Inelastic exact or run Demand or Supply II. Total Revenue Test If Demand is Elastic If Demand is Inelastic P TR P TR P TR P TR III. What Determines Price elasticity A. The number and note of substitute goods. B. The harmonize of income the purchase makes up. C. The size of the expenditure. D. The time visible(prenominal) for adjustments. E. Luxuries sc at to be elastic. F. Necessities operate to be inelastic. G. Durable goods tend to be elastic. H. Promotion. IV. Cross catch of Demand Shows whether two goods are substitutes or complements. Cross Elasticity Percentage trade in Q Formula Percentage swag in P If two goods are substitutes, the coefficient will be positive. If two goods are complements, the coefficient will be negative. V.

Income Elasticity of Demand Shows the responsiveness of certain goods to changes in real consumer income. Income Elasticity % turn in Q Demanded Formula % Change in Real Income Income-sensitive products beget a coefficient higher than 1. The coefficient! will vary according to income level. VI. Elasticity of Supply Shows the responsiveness of quantity supplied to a change in price. General Percentage Change in Q Supplied Formula Percentage Change in Price Determinants of Supply Elasticity A. short-term Period (inelastic supply) B. If you want to film a full essay, wander it on our website: BestEssayCheap.com

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