Chapter 5 Flashcards
1
Q
Define and explain the concept of elasticity
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2
Q
Formula for elasticity
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3
Q
Explain how elasticity applies to supply and demand
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4
Q
factors that increase elasticity of supply
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5
Q
factors that increase elasticity of demand
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6
Q
factors that decrease elasticity of supply
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7
Q
factors that decrease elasticity of demand
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8
Q
how elasticity changes the slope of each curve on supply and demand graphs
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9
Q
Calculate the elasticity:
Before: P= $40, Q(d)= 100
After: P= $50, Q(d)= 20
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10
Q
the difference between the elasticity formula and the slope formula
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11
Q
why we use the more complicated elasticity formula
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12
Q
how elasticity impacts revenues if prices change
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13
Q
Define elastic
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14
Q
Define inelastic
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15
Q
You reduce prices by 5% on a good with a demand elasticity of 0.7. How much does quantity increase?
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