CHAPTER 5 Elasticity
CHAPTER 5Elasticity2What you will learn in this CHAPTER :Definition of Elasticity price Elasticity of demand income Elasticity of demand and price Elasticity of supplyFactors that influence the size of elasticitiesHow Elasticity affects the incidence of a tax, and who bears its burden?3Defining and Measuring ElasticityThe price Elasticity of demand is the ratio of the percent change in the quantity demanded to the percent change in the price as we move along the demand World Demand for Oil5Using the Midpoint Methodto Calculate Elasticities6Some Estimated Price Elasticities of DemandGoodPrice elasticityInelastic demandEggs demandHousing
Income elasticity of demand ¾Normal Goods ¾Inferior Goods. 21 Price Elasticity of Supply The price elasticity of supply is a measure of the responsiveness of the quantity of a good supplied to the price of that good. 22. 23. 24 Factors that Determine the Price Elasticity of Supply
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