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11 Cards in this Set
- Front
- Back
Cross-Price Elasticity of Demand |
The percentage change in the quantity demanded of one good divided by the percentage change in the price of another good. |
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Elastic Demand |
Demand is elastic when the percentage change in the Quantity demanded is greater than the percentage change in price, so the price elasticity is greater than 1 in absolute value. |
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Elasticity |
A measure of how much one economic variable responds to changes in another economic variable. |
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Income Elasticity of Demand |
A measure of the responsiveness of the quantity demanded to changes in Income, measured by the percentage change in the quantity demanded divided by the percentage change in income.
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Inelastic Demand |
Demand is inelastic when the percentage change in quantity demanded is less than the percentage change in price, so the price elasticity is less than 1 in absolute value. |
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Perfectly Elastic Demand |
The case where the quantity demanded is infinitely responsive to price and the price elasticity of demand equals infinity.
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Perfectly Inelastic Demand |
The case where the quantity demanded is completely unresponsive to price and the price elasticity of demand equals zero.
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Price Elasticity of Demand |
The responsiveness of the quantity demanded to a change in price, measured by dividing the percentage change in the quantity demanded of a product by the percentage change in the product's price.
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Price Elasticity of Supply |
The responsiveness of the quantity supplied to a change in price, measured by dividing the percentage change in the quantity supplied of a product by the percentage change in the product's price. |
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Total Revenue |
The total amount of funds a seller receives from selling a good or service, calculated by multiplying price per unit by the number of units sold. |
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Unit-Elastic Demand |
Demand is unit elastic when the percentage change in quantity demanded is equal to the percentage change in price, so the price elasticity is equal to 1 in absolute value. |