Elasticity Lecture Notes

Practice flashcards covering key concepts of elasticity from the lecture notes.

Elasticity

The responsiveness of demand to price changes.

Price Elasticity of Demand

Measures how much quantity demanded of a good changes in response to a change in price.

Perfectly Inelastic Demand

Demand where quantity demanded does not change regardless of price changes.

Perfectly Elastic Demand

Demand where any change in price leads to an infinite change in quantity demanded.

Determinants of Elasticity

Factors that affect the elasticity of demand, including availability of substitutes, necessity versus luxury, and time.

Cross-Price Elasticity of Demand

Measures how the quantity demanded of one good responds to a change in the price of another good.

Income Elasticity of Demand

Measures how the quantity demanded of a good changes as consumer income changes.

Inelastic Demand

Demand where quantity demanded changes less than proportionately in response to price changes.

Unit Elastic Demand

Demand where quantity demanded changes exactly proportionately to price changes.

Elastic Demand

Demand where quantity demanded changes more than proportionately in response to price changes.