Elasticity Of Demand Flashcards
1
Q
Demand
A
The amount that an individual or individuals are willing to buy at any given price
2
Q
Demand normally increases when
A
Prices fall
3
Q
Demand normally falls when
A
Prices rise
4
Q
If demand changes a lot
A
It is elastic
5
Q
If demand changes very little
A
It is inelastic
6
Q
Why calculate price elasticity of demand
A
They can then change prices only on those items that would still be purchased
Calculating price Elasticity of demand means a business knows which product sales will fall a lot if prices are increased and which will fall very little
