Elasticity Formulas

Question 1

Elasticity of Supply (Es)

Answer 1

(Q2-Q1)/ 1/2 (Q2+Q1)
Over
(p2-p1)/1/2 (p2+p1)

Question 2

Income Elasticity of Demand (EI)

Answer 2

(Q2-Q1)/ 1/2 (Q2+Q1)
Over
(I2-I1)/1/2 (I2+I1)

Question 3

Cross Price Elasticity of Demand (Exy)

Answer 3

(Qx2-Qx1)/1/2 (Qx2+Qx1)
Over
(Py2-Py1)/1/2 (Py2+Py1)

Question 4

Elasticity of Supply (Es) Classifications

Answer 4

Infinity= Perfectly elastic
>1= elastic
<1= inelastic
equal to 1= unit elastic
equal to 0= perfectly inelastic

Question 5

Cross Price Elasticity of Demand (Exy) Classifications

Answer 5

Cross price >0= goods are substitutes
Cross price <0= goods are complements
Cross price =0= goods are unrelated

Question 6

Income of Elasticity Classifications

Answer 6

Income>0= normal good
Income<0= inferior good