Elasticity of demand Flashcards by Oliver McGowan | Brainscape

Q

What is the Equation for price elasticity of demand?

A

Price elasticity of demand = percentage change in quantity demanded/ percentage change in price

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Q

Is greater than 1 Elastic or Inelastic?

A

Price Elastic

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Q

Is less than 1 Elastic or Inelastic?

A

Price Inelastic

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Q

What is the equation for income elasticity of demand?

A

Income elasticity of demand = percentage change in quantity demanded/percentage change in income

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Q

A

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Q

How are inferior products affected?

A

Negative income elasticity of demand = means demand falls when income rises and demand rises when income falls

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Q

A

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