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Elasticity

Elasticity

  • Price Elasticity of Demand
  • Price Elasticity of supply
  • Income Elasticity of Demand
  • Cross-Price-Elasticity of Demand
  • Arc Elasticity
  • Using Calculus

Beginners

Guide

What is Elasticity?

  • Elasticity measures how sensitive people are to changes in prices

  • Law of Demand - If the price goes up, the Quantity demanded goes down

  • Allows us to analyze Demand with more precision

ELASTICITY

Different types

of Elasticity

EXPLANATIONS

Price Elasticity

of Demand / Supply

Price Elasticity

of Demand / Supply

Definition

  • economic measure

  • responsiveness of goods

  • change in price

  • change in Quantity

Definition

Factors Affecting Elasticity

  • the amount of income

  • time

  • availability of substitutes

  • degree of necessity

Calculus

Income Elasticity

INCOME ELASTICITY

Responsiveness of demand to a change in income.

Definition

Normal goods

  • Income rises, demand rises too

Elastic goods

  • Producers increase the price, no one will buy the product

Inelastic goods

  • product is completely insensitive to changes in income

Inferior Goods

  • Income rise demand falls

Different

Goods

Cross-Price-Elasticity/

Arc-Elasticity

Cross-Price-Elasticity/

Arc-Elastcity

Cross

Price

Elasticity

Measures the responsiveness for one good given a change in price of another.

  • substitutes

  • complements

Arc Elasticity

  • midpoint between two given points

Arc

Elasticity

References

References

  • http://www.yourarticlelibrary.com/economics/the-meaning-as-price-elasticity-of-demand-532-words/10582
  • https://www.cliffsnotes.com/study-guides/economics/demand-supply-and-elasticity/elasticity
  • https://www.investopedia.com/university/economics/economics4.asp
  • https://economictimes.indiatimes.com/markets/expert-view/oil-price-is-not-going-to-cool-down-it-will-only-go-up-rs-sharma/articleshow/65765670.cms
  • https://smallbiztrends.com/2013/10/price-elasticity-economics-set-prices.html
  • https://www.youtube.com/watch?v=HHcblIxiAAk
  • https://www.quora.com/What-is-a-demand-curve-When-is-it-linear
  • https://www.businesstopia.net/economics/micro/price-elasticity-demand
  • https://www.economicshelp.org/microessays/equilibrium/elasticity-supply/
  • https://www.khanacademy.org/economics-finance-domain/ap-microeconomics/ap-supply-demand-equilibrium/ap-price-elasticity-tutorial/a/price-elasticity-of-demand-and-price-elasticity-of-supply-cnx
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