MODULE 3

• Elasticity - measures how much buyers and sellers respond to changes in market conditions.
• coefficient of elasticity - is the number obtained when the percentage change in demand is divided by the percentage change in determinant. (Dinio & Villasis, 2017)
• Demand elasticity - is a measure of the degree of responsiveness of quantity demanded of a product to a given change in one of the independent variables that affect demand for that product. Classification of demand elasticity according to the factors that caused the change:
• Price elasticity of demand (Ed) - is the responsiveness of consumers' demand to the change in the price of goods sold.
• Arc elasticity - is computed by choosing two (2) points on the demand curve and comparing the percentage changes in the quantity and the price on those two (2) points (Dinio & Villasis, 2017).
• Inelastic - The demand for a product is inelastic when the change in quantity demanded is less than the price change. Consumers will pay almost any price for it. A producer/seller can increase prices without hurting the product's demand. Products and services that have no close substitutes are considered inelastic.
• Elastic - The demand for a product is elastic when the change in quantity demanded is greater than the price change. Consumers will only pay a certain price or a narrow range of prices for the product
• Unitary elastic - The demand for a product is unitary elastic when the change in quantity demanded is equal to the price change.
• Income elasticity of demand - is the responsiveness of consumers' demand to the change in their income.
• Normal good. An increase in income brings a rise in demand for the good. A decrease in income brings a fall in the demand for the good. T
• Inferior good - An increase in income brings a fall in the demand for the good.
• Cross-price elasticity of demand - is the responsiveness of demand for a good concerning the changes in the price of related goods.
• Substitute good - Two (2) goods that have a positive relationship between the quantity demanded of one good, and the price of the other are considered substitutes.
• Complementary good - Two (2) goods that have a negative relationship between the quantity demanded of one good and the price of the other are considered complements
• Supply elasticity - measures the degree of supply's responsiveness to a given price change.
• Market structure - is a classification system for the key traits of the market, including the number of firms, the similarity of the products they sell, and the ease of entry into and exit from the market structure (Viray Jr. & Avila-Bato, 2018).
• Monopoly - is the extreme opposite of perfect competition. The consumers are limited to two (2) choices – either purchase the monopolist’s product or none since there are no close substitutes for the products
• Bilateral monopoly – A market situation in which there is one (1) seller and only one (1) buyer.
• Bilateral oligopoly – A market condition with significant degrees of seller concentration and buyer concentration.
• Duopsony – A market situation with only two (2) buyers and many sellers.
• Duopoly – A subset of oligopoly. There are only two (2) suppliers in the market.
• Monopsony – A form of buyer concentration. It is a market situation with a single buyer dealing with many small suppliers