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econ 1.2.3 - Coggle Diagram
econ 1.2.3
formulae
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ped = % Change (∆) qty
% ∆ Price
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xed = % ∆ qtyA
% ∆ price B
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price & cost
price - what consumers pay for the finished product (negative relationship between price and demand)
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elastic vs. inelastic
elastic - the demand is responsive to a change in price. A change in price will lead to a more than proportional change in qty demanded
inelastic - the demand is not responsive to a change in price. A change in price will lead to a less than proportional change in demand
price elasticity of demand - measures the responsiveness of quantity demanded to a given change in price
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income elasticity of demand - measures the responsiveness of quantity demanded to a given change in income
cross elasticity of demand - measures the response of quantity demanded for good a to the change in price of good b
