Elasticity Of Demand Flashcards
Price Elasticity of Demand is typically ______ and why?
They are typically negative, since quantity demanded typically falls as price rises.
Is Price Elasticity of Demand constant a long a demand curve?
They are typically not constant along a demand curve (elasticity increases as we move up the demand curve).
What is a vertical demand curve?
one for which the quantity demanded does not change when price rises; in this case, demand is perfectly inelastic.
What is a horizontal demand curve?
one where quantity demanded changes infinitely for even a very small change in price; in this case, demand is perfectly elastic.
What is the cross-price elasticity?
The effect of one good’s prices on the demand for another good
Will the change in one price effect the change in another?
Typically yes
