Table of Contents
Elasticity
Today you will learn:
Elasticity = Responsiveness
A Ratio ...
Many Different Measures of Elasticity ...
Other Measures of Elasticity ...
Price Elasticity Formulas
Percent Change
PPT Slide
PPT Slide
PPT Slide
Point Elasticity: Measured at a Point
Point Elasticity: E = MT / OM
Point Formula: MT/OM; If P = $5, E = 50/30 = 1.67
Another Point Elasticity Formula
Q = 12,275 - 250 P
Determinants of Elasticity
More substitutes means more elastic D
More Competition Means More Elastic D
As proportion of income spent on good increases, elasticity increases
Over time elasticity increases
Luxuries have more elastic D
More on Elasticity
Responsiveness varies
Relationship between Elasticity & TR
When P changes ...
Elasticity & TR
Elasticity Vs. Slope
Elasticity Applications
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