APPLIED ECONOMICS

A change in price creates an equal change in quantity demanded.

• Perfectly Elastic Demand

• Unitary Demand

Es = ∞

• Unitary Supply

• Inelastic Supply

• Elastic Supply

• Perfectly Elastic Supply

FORMULA OF PRICE PRICE ELASTICITY OF SUPPLY

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Percent change in demand is less than percentage change in price.

• Perfectly Inelastic demand

• Inelastic demand

What is Elasticity

• Is an assessment of how much buyers and sellers act in response to changes in market conditions.

• Is an assessment of how much buyers and sellers change the response in market conditions.