Transcription of CHAPTER 5 Elasticity - Sacramento State
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CHAPTER 5 Elasticity2 What 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?3 Defining 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 Oil5 Using the Midpoint Methodto Calculate Elasticities6 Some Estimated Price Elasticities of DemandGoodPrice elasticityInelastic demandEggs demandHousing meals travel travel Elasticity of demand < 1 Price Elasticity of demand > 17 Interpreting the Price Elasticity of Demand: How Elastic Is Elastic?
2 What you will learn in this chapter: Definition of elasticity ¾price elasticity of demand ¾income elasticity of demand and ¾price elasticity of supply Factors that influence the size of elasticities How elasticity affects the incidence of a tax, and
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