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MI07 Price Elasticity - Coggle Diagram
MI07 Price Elasticity
Elasticity
Price
PED = (∆Q/Q)/(∆P/P)
Responsiveness
E = (∆Q/Q)/(∆X/X)
PES
Types
= 1
unit elastic
PES < 1
inelastic
PES >1
elastic
Extremes
perfectly inelastic
perfectly elastic
Factors
Time
Capacity
Resource
Substitutability
Stock
PES = (∆Q/Q)/(∆P/P)
PED
Factors
Substitutes
availability
Income
proportion
Time
Nature
necessity
luxury
Scope
Types
= -1
unit elastic
Absolute value < 1
inelastic
Absolute value > 1
elastic
Extremes
Perfectly elastic
Perfectly Inelastic
Negative
Linear Demand