elastic demand
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9 Terms
what indicates elastic demand?
any answer for elasticity that is more than 1
if price increases…
…quantity demanded decreases
what is an inelastic product?
a necessity or something without a substitute
e.g., alcohol, electricity, drugs
a rise in price will lead to an increase in revenue
what is an elastic good?
things that are not needs, or something substitutable
e.g. clothes, phones, whatever is deemed in your income that is a want and not a need.
what is unit elasticity?
if you increase price, the quantity demanded decreases by the same amount as the price went up
what is PED?
price elasticity of demand
when is a product perfectly price inelastic?
when quantity demanded of the good does not change when its price changes.
shown in vertical line
when is a product perfectly price elastic?
when quantity demanded falls to zero when its price changes.
shown in horizontal line