Term
| price elasticity of demand |
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Definition
| measures how responsive quantity demanded is to a price change |
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Term
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Definition
ED= change of q + change of p (q+q')/2 (p+p')/2 |
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Term
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Definition
| a change in price has relatively little effect on quantity demand |
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Term
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Definition
| the percentage change in quantity demanded equals the percentage change in price |
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Term
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Definition
| a change in price has a relatively large effect on quantity demanded |
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Term
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Definition
| price multiplied by the uantity demanded at that price |
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Term
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Definition
| a straight- line demand curve |
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Term
| perfectly inelastic demand curve |
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Definition
| a vertical line reflecting a situation in which any price change has no effect on the quantity demanded |
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Term
| perfectly elastic demand curve |
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Definition
| a horizontal line reflecting a situation in which any price increase would reduce quantitiy demanded to zero |
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Term
| unit-elastic demand curve |
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Definition
| everywhere along the demand curve, the percentage change in price causes an equal ut off setting percentage change in quantity demanded so total revenue remains the same. |
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Term
| constant- elasticity demand curve |
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Definition
| the type of demand that exists when price elasticity is the same everywhere along the curve |
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Term
| price elasticity of suply |
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Definition
| a measure of the responsiveness of quantity supplied to a price change |
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Term
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Definition
| a change in price has relatively little effect on quantity supplied |
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Term
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Definition
| the percentage change in quantity supplied equals the percentage change in price |
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Term
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Definition
| a change in price has a rlatively large effect on quantity supplied |
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Term
| perfectly elastic supply curve |
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Definition
| a horizontal line reflecting a sitution in which any price decrease drops the quantity supplied to zero |
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Term
| perfectly inelastic supply curve |
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Definition
| a vertical line reflecting a situation in which a price change has no effect on quantity supplied |
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Term
| unit-elastic supply curve |
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Definition
| a percentage change in price causes an identical percentage change in quantitiy supplied |
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Term
| income elasticity of demand |
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Definition
| the percentage change in demand divided by the percentage change in consmer income |
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Term
| cross- price elasticity of demand |
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Definition
| the percentage change in the demand of one good divided by the percentage change in the price of another good |
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