ELASTICITIES Flashcards
1
Q
PRICE ELASTICITY OF DEMAMD (PED)
A
% change in demand / % change in price
2
Q
INCOME ELASTICITY (YED)
A
% change in quantity demanded / % change in income
3
Q
CROSS ELASTICITY OF DEMAND (XED)
A
% change in demand for good A / % change in price for good B
4
Q
PRICE ELASTICITY OF SUPPLY
A
% change in quantity supplied / % change in price
5
Q
INELASTIC
A
X<1 means that it’s inelastic. This shows that the demand for a product doesn’t change much when the price fluctuates, usually due to the product being essential eg. Fuel
6
Q
ELASTIC
A
X>1 This means that it’s elastic. Shows how the demand for the product does change depending on the price.
