Ecos1011s Study guides, Study notes & Summaries

This chapter introduces students to the concept of elasticity of demand. A demand elasticity measures how consumer demand responds to changes in a variable in the demand function. The price elasticity of demand is the key elasticity measure discussed in this chapter. It measures the sensitivity of the consumer’s behavior to changes in the price of the product by dividing the percentage change in the quantity demanded by the percentage change in the price that induced the change in the quanti...