MANRECO ||

• Perfect elasticity example medicine lifes sustaining
• Price of elasticity of demand - quantifies or measures the sensitivity of response of the quantity demand to the change in price of goods and service
• Inferior good- do not consume if there is sudden increase in income
• Normal good- consume despite income increases
• What is the coefficient of elasticity? -Negative
• The coefficient of elasticity is absolute value because of? Opposite relationship between price of the product
• Ped is greater than 1=ped greater than 1


  Elastic
• Ped is less than 1


  Inelastic
• Product is an essential or important good


  Inelastic
• Buyers show little response to the change in its price

  Inelastic
• Coefficient of price elasticity is equals to 1


  Unitary elastic
• This is proportional variation or change in the qd and the price of the products

  Unitary elastic
• Ped is ∞

  Perfectly elastic
• Signifies when seller increases the price of his product no one will buy from him

  Perfectly elastic
• Ped is 0


  Perfectly inelastic
• Means that consumer still buy the exact quantity of the product regardless of the price

  Perfectly inelastic
• %∆QD/%∆P

  PED
• Change in qd/q1

  Ped
• Signifies the sensitivity of quantity demanded to the % change in income of the consumers

  Income elasticity of demand
• Calculate how the supplier respond to the variation of product price in the market

  Price elasticity of supply
• Always positive due to the direct relationship

  Elasticity of supply
• Are goods or services whose demand is highly responsive to changes in price.

  Elastic products