(1) Price Elasticity of Demand I: Concept & Calculation
Price Elasticity of Demand
Elasticity, Price Elasticity, Sensitivity, Responsiveness, How Much, Stimulus-Response, Relative Change, Elastic, Inelastic, Unitary Elastic, Perfectly Inelastic
This introduces the general concept of elasticity as a measure or indicator of relative responsiveness. The focus in on changes measured as percentages. The more specific concept of Price Elasticity of Demand is introduced. The general approach to calculation of a price elasticity is identified. The interpretation of an elasticity index is explained.
Crane, Steven E., "(1) Price Elasticity of Demand I: Concept & Calculation" (2011). Principles of Microeconomics. Paper 63.
Ability to explain concept of elasticity as a relative change indicator. Understanding of special case of price elasticity of demand. Ability to distinguish and explain elastic, inelastic and unitary price elasticity of demand. Ability to calculate and interpret a price elasticity value.
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