Elasticity Flashcards
1
Q
Elasticity- Responsiveness
A
Elasticity answers the question “by how much quantity will decrease or increase?”
It also affects demand and supply.
The opposite of elasticity is inelasticity.
The goods are not elastic, but the demand and supply for a good are elastic.
2
Q
Types of Elasticity
A
Price elasticity of Demand (PED)
Income elasticity of Demand (YED)
Cross elasticity of Demand (XED)
Price elasticity of Supply (PES)
3
Q
PED
A
the responsiveness of demand to a change in price
4
Q
YED
A
the responsiveness of demand to a change in income
5
Q
XED
A
the responsiveness of qd of one good to a change in the price of another good
good y quanity good x price
6
Q
PES
A
the responsiveness of supply to a change in price
