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elasticity
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measures how much one economic variable responds to changes in another economic variable
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price elasticity of demand
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measures how responsive quantity demanded is to a price change; the percentage change in quantity demanded divided by the percentage change in price
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elastic
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price elasticity of demand is greater than 1 in absolute value
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inelastic
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price elasticity of demand is less than 1 in absolute value
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unit elastic
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price elasticity of demand is equal to 1 in absolute value
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perfectly inelastic demand
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curves are vertical lines
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perfectly elastic demand
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curves are horizontal lines
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total revenue
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The total amount of funds received by a seller of a good or service, calculated by multiplying price per unit by the number of units sold
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cross-price elasticity of demand
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is equal to the percentage change in 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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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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