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Consumer surplus
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the difference between the price a consumer pays for an item and the price he would be willing to pay rather than do without it.
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producer surplus
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the difference between how much a person would be willing to accept for given quantity of a good versus how much they can receive by selling the good at the market price.
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elasticity
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a numerical measure of responsiveness of one variable following a change in another variable, ceteris paribus.
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elastic
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where the relative change in demand or supply is greater than the change in price.
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inelastic
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where the relative change in demand or supply is less than the change in price.
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unit elastic
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where the change in price is relatively the same as the change in quantity demanded giving a numerical value of 1.
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perfectly elastic
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where all that is produced is sold at a given price.
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perfectly inelastic
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where a change in price has no eff ect on the quantity demanded.
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PED ( Price elasticity of demand)
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a numerical measure of the responsiveness of the quantity demanded to a change in price of a product.
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PES (Price elasticity of supply)
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a numerical measure ofthe responsiveness of the quantity supplied to a change in the price of the product.
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XED (Cross elasticity of demand)
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a numerical measure of the responsiveness of the quantity demanded for one product following a change in the price of another related product.
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YED (Income elasticity of demand)
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a numerical measure of the responsiveness of the quantity demanded following a change in income.
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