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Elasticities - Coggle Diagram
Elasticities
PED
% change in the quantity demanded / % change in price
Elastic > 1
Inelastic < 1
Unitary = 1
YED
% change in quantity demanded / % change in income
Inferior Goods < 0
Normal Goods > 0
Luxury Goods > 1
XED
Substitutes
As price of good y increases demand of good x increases
Elastic value shows it is a close substitute
Inelastic value shows it is a weak substitute
No Relationship
Price of good y has no effect on demand of good x
Complementary Goods
As price of good y increases demand of good x decreases
Elastic value shows they are close complements
Inelastic value shows they are weak complements
% change in the quantity demanded of good X / % change in the price of good Y