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Elasticities


Elasticity: a measure of how buyers or sellers respond to changing market conditions


Various Elaasticities:

  • Pirce Elasticity of Demand

  • Cross- Price elasticity of Demand

  • Income Elasticity of demand

  • Price Elasticity of supply


Price Elasticy of Demand: measures how quantity demanded of a good reponds to change in its price


Ep= percetaeg change in qd/ percentage change in p


Elatic Demand: is highly reponsive to a price change


Inlastic Demand: is less resposnive to a price change