Elasticity and slope (Price. (It determines other dependent variables.,…
Elasticity and slope
It determines other dependent variables.
Availability. (promissory fulfilled).
It is an independent factor.
It is measurable.
It is a exchange unit.
consumes the unit
it is not neutral
determine the demand factor of market
Elasticity of demand
Price elasticity of supply
:small_red_triangle:S/S :heavy_division_sign: :small_red_triangle:P/P
Measures the relationship between change in quantity supplied following a change in price.
Price elasticity of demand
:small_red_triangle:Q/Q :heavy_division_sign: :small_red_triangle:P /P
Measures the change in quantity demanded of a product in relation to its price change.
The % change in to the price in accordance with the % change in quantity demand.
Elasticity cases: (consumer behavior)
Elasticity > 1
Price :arrow_up: 2% , Quantity in demand :arrow_down:9%
Elasticity < 1
In elastic (less elastic)
Price :arrow_up:2% , quantity in demand :arrow_down: 1%
Elasticity = 1
Elastic (unit elastic) equal behaviour on both sides.
Price :arrow_up: 2% , quantity in demand :arrow_down: 2%
Three types of human behavior. (Responsiveness)
more return effort from others.
lesser in return effort from others.
equal return effort from others.