# economics ch 5

Total word count: 456
Pages: 2

### Calculate the Price

- -
275 words
Looking for Expert Opinion?
Let us have a look at your work and suggest how to improve it!
 the price elasticity of demand measures how much quantity demaned responds to a change in price demand is said to be price elastic if buyers respond substantially to changes in the price of a good demand is said to be inelastic if the quantity demanded changes inly slightly when the price of the good changes demand is elastic if the price elasticity of demand is greater than 1 demand is inelastic if the price elasticity of demand is less than 1 goods with many close substitutes tend to have more elastic demands for a good that is a luxury demand tends to be elastic for a good that is a necessity demand tends to be Inelastic a good will have more inelastic demand the broader the definition of the market economists compute the price elasticity of demand as the percentage change in quanitity demanded divided by the percentage change in price if the price elasticity of demand for a good is 2.0 then a 10 percent increase in price results in 20 percent decrease in quanityty demanded when demand is perfectly inelastic the demand curve will be vertical bc buyers purchase the same amount as before whenever the price falls or rises demand is said to have unit elasticity if the price elasticity od demand is equal to 1 when demand is elastic a decrease in price will cause an increase in total revenue when demand is inelastic an increase in price will cause an increase in total revenue when demand is unit elastic price elasticity of demand equals 1, and total revenue does not change when price changes incomse elasticity of demand measures how the quantity demanded changes as consumer income changes if an increase in income results in a decrease in quantity demanded of a goos then for that good the income elasticity of demand is negative assume that a 4% increase in income results in a 2% increase in quantity remaded of a good. income elasticity of demand for the good is positive, and the good is a normal good cross price elasticity of demand measures how the quantity demanded of one good changes in response to a change in price of another good if 2 goods are substitutes their cross price elasticity will bw positive if 2 goods are complements their cross price elasticity will be negative if the quantity supplies responds only slightly to changes in price then supply is said to be inelastic Key determinant of the price elasticity of supply is the time horizon if the quantity supplies is the same regardless of price then supply is perfectly inelastic suppose that corn farmers want to increase their total revenue knowing that the demand for corn is inelastic corn farmers should reduce the number of acres on which they plant corn

### More flashcards like this

#### NCLEX 10000 Integumentary Disorders

When assessing a client with partial-thickness burns over 60% of the body, which finding should the nurse report immediately? a) ...

#### NCLEX 300-NEURO

A client with amyotrophic lateral sclerosis (ALS) tells the nurse, "Sometimes I feel so frustrated. I can’t do anything without ...

#### NASM Flashcards

Which of the following is the process of getting oxygen from the environment to the tissues of the body? Diffusion ...

## Unfinished tasks keep piling up?

Let us complete them for you. Quickly and professionally.

Check Price 