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Elasticity
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A general concept used to quantify the response in one variable when another variable changes
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Price elasticity of demand
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The ratio of the percentage of change in quantity demanded to the percentage of chance in price; measures the responsiveness of quantity demanded to changes in price
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Perfectly inelastic demand
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Demand in which quantity demanded does not respond at all to a change in price
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Inelastic demand
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Demand that responds somewhat, but not a great deal, to changes in price. Inelastic demand always has a numerical value between zero and -1
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Unitary elasticity
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A demand relationship in which the percentage change in quantity of a product demanded is the same as the percentage change in price in absolute value. A demand elasticity of -1.
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Elastic demand
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A demand relationship in which the percentage change in quantity demanded is larger than the percentage change in price in absolute value. A demand elasticity with an absolute value greater than 1.
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Perfectly elastic demand
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Demand in which quantity drops to zero at the slightest increase in price
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Income elasticity of demand
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A measure of the responsiveness of demand to changes in income
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Cross- price elasticity of demand
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A measure of the response of the quantity of one good demanded to a change in the price of another good
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Elasticity of supply
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A measure of the response pf quantity of a good supplied to a change in price of that good.
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