important Flashcards
What is price elasticity of demand?
Elasticity of demand refers to the change in quantity demanded in relation to change in price.
what is elastic demand
Elastic demand occurs when the change in a product’s quantity demanded is greater than a change in price.
It is usually represented by a “flatter” demand curve.
what is inelastic demand
Inelastic demand occurs when the change in a product’s quantity demanded is less than a change in price. It is usually represented by a “taller” demand curve.
what is elasticity of supply
the responsiveness of the quantity supplied of a good or service by producers to a change in the good or service’s price
What is Price Discrimination used for by businesses and how can they apply this price discrimination in relation to price elasticity to a product?
Different consumer groups have different price elasticity of demand for the same products. Businesses can use this information to charge different prices and increase their total revenue.
What is the definition of Price Discrimination?
Price discrimination is a practice when businesses charge different prices for different demographics, situations, or times for the same product depending on their elasticity to price changes.
