Formula sheet IB Economics HL
Demand function:
𝑄𝑑 = 𝑎 − 𝑏𝑃
Qd = quantity demanded
P = price
a = Qd if price is zero
b = slope
Supply function:
𝑄𝑠 = 𝑐 + 𝑑𝑃
Qs = quantity supplied
P = price
a = Qs if price is zero
b = slope
Community surplus:
Consumer surplus + producer surplus = community surplus (total benefit to society)
% change for elasticities:
new value - old value
% change = × 100
old value
Price elasticity of demand (PED):
% change in Qd
PED =
% change in price
Cross elasticity of demand (XED):
% change in Qd of product X
XED =
% change in price of product Y
Income elasticity of demand (YED):
percentage change in Qd
YED =
% change in income of consumer
Price elasticity of supply (PES):
% change in Qs
PES =
% change in price
Demand function:
𝑄𝑑 = 𝑎 − 𝑏𝑃
Qd = quantity demanded
P = price
a = Qd if price is zero
b = slope
Supply function:
𝑄𝑠 = 𝑐 + 𝑑𝑃
Qs = quantity supplied
P = price
a = Qs if price is zero
b = slope
Community surplus:
Consumer surplus + producer surplus = community surplus (total benefit to society)
% change for elasticities:
new value - old value
% change = × 100
old value
Price elasticity of demand (PED):
% change in Qd
PED =
% change in price
Cross elasticity of demand (XED):
% change in Qd of product X
XED =
% change in price of product Y
Income elasticity of demand (YED):
percentage change in Qd
YED =
% change in income of consumer
Price elasticity of supply (PES):
% change in Qs
PES =
% change in price
