Elasticity Flashcards
1
Q
What is the elasticity of demand formula?
A
% Change in Quantity / % Change in Price
2
Q
After you calculate elasticity from the formula, how can you tell wether something is Elastic, Unitary, or Inelastic?
A
CALCULATED OUT IS:
- GREATER THAN 1 = ELASTIC
- EQUAL TO 1- UNITARY
- LESS THAN ONE- INELASTIC `
3
Q
If you get an outcome of elasticity that is greater than one, how does that impact total revenue?
A
DECREASE IN REVENUE
DEMAND > PRICE
4
Q
If you get an outcome that is inelastic or the result is less than one, how does that impact total revenue?
A
INCREASE TOTAL REVENUE
PRICE > DEMAND
