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1、ElasticityandItsApplication1©2012CengageLearning.AllRightsReserved.Maynotbecopied,scanned,orduplicated,inwholeorinpart,exceptforuseaspermittedinalicensedistributedwithacertainproductorserviceorotherwiseonapassword-protectedwebsiteforclassroomuse.TheElasticityofDemandElasticityMeasureoftherespo
2、nsivenessofquantitydemandedorquantitysuppliedToachangeinoneofitsdeterminantsPriceelasticityofdemandHowmuchthequantitydemandedofagoodRespondstoachangeinthepriceofthatgood2©2012CengageLearning.AllRightsReserved.Maynotbecopied,scanned,orduplicated,inwholeorinpart,exceptforuseaspermittedinalicense
3、distributedwithacertainproductorserviceorotherwiseonapassword-protectedwebsiteforclassroomuse.TheElasticityofDemandPriceelasticityofdemandPercentagechangeinquantitydemandeddividedbythepercentagechangeinpriceElasticdemandQuantitydemandedrespondssubstantiallytochangesinpriceInelasticdemandQuanti
4、tydemandedrespondsonlyslightlytochangesinprice3©2012CengageLearning.AllRightsReserved.Maynotbecopied,scanned,orduplicated,inwholeorinpart,exceptforuseaspermittedinalicensedistributedwithacertainproductorserviceorotherwiseonapassword-protectedwebsiteforclassroomuse.TheElasticityofDemandDetermin
5、antsofpriceelasticityofdemandAvailabilityofclosesubstitutesGoodswithclosesubstitutes–moreelasticdemandNecessitiesvs.luxuriesNecessities–inelasticdemandLuxuries–elasticdemand4©2012CengageLearning.AllRightsReserved.Maynotbecopied,scanned,orduplicated,inwholeorinpart,exceptforuseaspermittedinalic
6、ensedistributedwithacertainproductorserviceorotherwiseonapassword-protectedwebsiteforclassroomuse.TheElasticityofDemandDeterminantsofpriceelasticityofdemandDefinitionofthemarketNarrowlydefinedmarkets–moreelasticdemandTimehorizonDemandismoreelasticoverlongertimehorizons5©2012CengageLearning.All
7、RightsReserved.Maynotbecopied,scanned,orduplicated,inwholeorinpart,exceptforuseaspermittedinalicensedistributedwithacertainproductorserviceorotherwiseonapassword-protectedwebsiteforclassroomuse.TheElasticityofDemandComputingthepriceelas