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Elasticity
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Measures how much one economic variable response to changes in another economic variable
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Price elasticity of demand
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Measures how responsive the quantity demanded is to changes in price
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Elastic
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quantity demanded changes more than proportionally when prices change, the price elasticity of demand is greater than 1 in absolute value.
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Inelastic
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The quantity demanded changes less than proportionally when price changes, the price elasticity is les than 1 in absolute value.
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Unit Elastic
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when the percentage change in price and quantity demanded are the same
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Perfectly elastic demand
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Horizontal lines
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Perfectly inelastic demand
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vertical lines
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Total Revenue
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Total amount of funds received by a seller of a good or service.
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Cross-price elasticity of demand
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Is equal to the percentage change in the quantity demanded of one good divided by the percentage change in the price of another good.
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Income elasticity of demand
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is equal to the percentage change in the quantity demanded divided by the percentage change in income
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Price elasticity of supply
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equal to the percentage change in quantity supplied divided by the percentage change in price.
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