Elasticity Flashcards
1
Q
Price elasticity of demand
A
measure how sensitive the demand for a good is to changes in price
2
Q
When price elasticity of demand is greater than 1 it is
A
elastic
3
Q
when price elasticity of demand is less than 1 it is
A
inelastic
4
Q
when price elasticity of demand is equal to 1 it is
A
unit elastic
5
Q
the more substitutes for buyers…
A
the more elastic demand is
6
Q
What does more competing products mean for price elasticity of demand?
A
greater elasticity
7
Q
What is the demand elasticity of necessities?
A
less elastics (have to purchase either ways)
8
Q
When consumers are willing to search more for a cheaper/alternative option…
A
demand is more elastic
9
Q
What happens to elasticity of demand over time?
A
it becomes more elastic
10
Q
mid-point formula
A
(new value-old value/(new value-old value/2)) *100
11
Q
A
12
Q
A
