Definitions
• Price Elasticity of Demand measures how se
consumers are to a change in price.
• Income Elasticity of Demand measures the responsi
of quantity demanded given a change in income.
• Cross price Elasticity of Demand looks at how the qu
demanded of one good is affected by a change in
of another.
,
, Definitions
• Elastic demand: When consumers are sensitive to c
in prices or income.
§ There is a more than proportionate response.
• Inelastic demand: When consumers are unresponsiv
change in prices or income.
§ There is a less than proportionate response.
• Price Elasticity of Demand measures how se
consumers are to a change in price.
• Income Elasticity of Demand measures the responsi
of quantity demanded given a change in income.
• Cross price Elasticity of Demand looks at how the qu
demanded of one good is affected by a change in
of another.
,
, Definitions
• Elastic demand: When consumers are sensitive to c
in prices or income.
§ There is a more than proportionate response.
• Inelastic demand: When consumers are unresponsiv
change in prices or income.
§ There is a less than proportionate response.
