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Chapter 4 Elasticity of Demand & Supply - Coggle Diagram
Chapter 4 Elasticity of Demand & Supply
PED
factors affecting
No. of and closeness of substitutes in the same price range
Proportion of income consumers spent of the good
Degree of necessity of the good to the consumer
Consumers' habit
Time period
PES
factors affecting
Time period: VSR vs SR vs LR
Mobility & substitutability of FOP
Spare capacity of firms
Level of stocks/inventories
Complexity of production process
XED
+ve XED, substitutes
-ve XED, complements
XED=0, unrelated goods
Relationship between goods
XED high & +ve: good subsitutes
XED high & -ve: close complements
XED low & +ve: poor subsitutes
XED low & -ve: poor complements
YED
+ve YED, normal goods
-ve YED, inferior goods
factors affecting
Nature of goods: necessities vs luxuries
Level of income
PED/PES/XED/YED>1: elastic
PED/PES/XED/YED<1: inelastic