elasticity Flashcards
1
Q
what is elasticity of demand
A
measures how sensitive quantity demanded is to a change in price
2
Q
what’s inelastic
A
when the quantity is insensitive to a change in price because they have very substitutes
3
Q
what is elastic demand
A
when the quantity is sensitive to a change in price products have many substitutes and luxury goods and have elasticity greater than 1
4
Q
what is unit elastic
A
when the quantity goes down by one and price goes up the same
