Chapter 4

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Created by
Asil Pabello

Cards (6)

  • elasticity: a measure of how much one economic variable - such as the quantity demanded of a product - responds to changes in another economic variable - such as the product’s price
  • Elastic demand:
    PED > 1 (ignore negative)
  • Inelastic demand:
    PED < 1 (ignore negative)
  • Perfectly inelastic:
    No change in quantity demand (Qd) when price change
  • Perfectly elastic demand:
    PED = ♾
  • Unit elastic:
    when % price change and % quantity change is the same.
    PED = 1 (ignore negative)