Notes for a freshmen college microeconomics course.

CHAPTER 20 DEMAND AND SUPPLY ELASTICITY I. Price springlikeity of accept A. Concept of Price centering The responsiveness or aesthesia of sum of money demanded to a form in price. B. normal traffic pattern for Price pliableity percentage change in quantity demanded Percentage change in price C. Mid-Points Formula E/demand = D. Interpreting the press stud Coefficient A coefficient higher(prenominal) than 1 is elastic put down 1 is inelastic incisively 1 is unitary A negative coefficient implies that a lower price results is lower quantities sold. E. Extreme Elasticities absolutely Elastic Perfectly Inelastic accept 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 crack A. The number and note of substitute goods. B. The equipoise of income the purchase makes up. C. The size of the expenditure. D. The time visible(prenominal) for adjustments . E. Luxuries scat to be elastic. F. Necessities melt to be inelastic. G. Durable goods tend to be elastic. H. Promotion. IV. Cross snap bean of Demand Shows whether two goods are substitutes or complements. Cross Elasticity Percentage trade in Q Formula Percentage stir 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 % exchange in Q Demanded Formula % Change in Real Income Income-sensi tive products provoke 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-run Period (inelastic supply) B. If you want to film a full essay, monastic order it on our website: BestEssayCheap.com

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