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elasticity of demand
measures how consumers respond to change in price
perfect inelastic
0
relatively inelastic
<1
unit elastic
1
relatively elastic
>1
perfect elastic
infinity
on a graph elastic demand is….
on the top
on a graph unit elastic is…
on the curve
on a graph inelastic demand is…
on the bottom
Cross- Price elasticity of demand
measures how a price change in one product affects the quantity demand of another
formula for finding elastic of demand
Ed= % change in quantity demand over % change in price
formula for calculating a precent change
% change in P or Qd= change in P or Qd over initial P or Qd
formula for cross- price elasticity of demand
CPED= % delatH quantity demand of product X over % deltaH price of product Y