100% satisfaction guarantee Immediately available after payment Both online and in PDF No strings attached
logo-home
Previously searched by you
Previously searched by you
logo
Summary Elasticity explained R70,00
Add to cart
Quickly navigate to
Preview
  2.  
  3. Stanford University
  4.  
  5. Introduction to microeconomics

Summary

Summary Elasticity explained

 5 views  0 purchase

A summary on elasticity, covering: elasticity of demand, cross price elasticity, income elasticity, determinants of price elasticity of demand, and elasticity of supply. There are graphs to aid your understanding.

Preview 2 out of 5  pages

Document information

  • February 5, 2022
  • 5
  • 2021/2022
  • Summary

Subjects

Written for

All documents for this subject (1)

Seller

avatar-seller
mandimngezana

Content preview

Elasticity of demand measures how responsive the demand of a product is to changes in the factors affecting demand.

Price (own) Elasticity of demand measures how much the quantity demanded changes, relative to a change in price.




Cross price elasticity of demand measures how the quantity demand of one good changes as the price of another good
changes




% Change in quantity demanded of product 1

% Change in price of product 2




Cross price elasticity of demand is positive for substitute goods and negative for complementary goods.

Income elasticity of demand measures how the quantity demanded changes as the consumer income changes.




Income elasticity is positive for normal goods and negative for inferior goods.

Price elastic demand: when price increases the quantity demanded decreases by more than the increase in price, thus total
revenue increases

Price Inelastic demand: when price increases the quantity demanded decreases by less than the increase in price, thus total
revenue decreases

Determinants of price elasticity of demand:
*Availability of close substitutes: products with close substitutes are more elastic
*Necessities vs Luxuries: demand for necessities is inelastic and the demand for luxuries is elastic.
*Definition of the market: narrowly defined markets are more elastic than broadly defined markets
*Time horizon: more elastic in the long run
*Percentage of income devoted to the product
*The degree of brand loyalty/addition

,

The benefits of buying summaries with Stuvia:

Guaranteed quality through customer reviews

Guaranteed quality through customer reviews

Stuvia customers have reviewed more than 700,000 summaries. This how you know that you are buying the best documents.

Quick and easy check-out

Quick and easy check-out

You can quickly pay through EFT, credit card or Stuvia-credit for the summaries. There is no membership needed.

Focus on what matters

Focus on what matters

Your fellow students write the study notes themselves, which is why the documents are always reliable and up-to-date. This ensures you quickly get to the core!

Frequently asked questions

What do I get when I buy this document?

You get a PDF, available immediately after your purchase. The purchased document is accessible anytime, anywhere and indefinitely through your profile.

Satisfaction guarantee: how does it work?

Our satisfaction guarantee ensures that you always find a study document that suits you well. You fill out a form, and our customer service team takes care of the rest.

Who am I buying this summary from?

Stuvia is a marketplace, so you are not buying this document from us, but from seller mandimngezana. Stuvia facilitates payment to the seller.

Will I be stuck with a subscription?

No, you only buy this summary for R70,00. You're not tied to anything after your purchase.

Can Stuvia be trusted?

4.6 stars on Google & Trustpilot (+1000 reviews)

50843 documents were sold in the last 30 days

Founded in 2010, the go-to place to buy summaries for 14 years now

Start selling
R70,00
  • (0)
Add to cart
Added