Chapter 5

is an economics concept that measures the

responsiveness of one variable to changes in another variable.

• Elasticity

• Price Elasticity

• Price Elasticity of Demand

• Price Elasticity of Supply

is the ratio between the percentage change in the

quantity demanded (Qd) or supplied (Qs), and the corresponding

percent change in price.

• Elasticity

• Price Elasticity

• Price Elasticity of Demand

• Price Elasticity of Supply

percentage change in the quantity

demanded of a good or service divided the percentage

• Elasticity

• Price Elasticity

• Price Elasticity of Demand

• Price Elasticity of Supply

the percentage change in quantity

supplied divided by the percentage change in price.

• Elasticity

• Price Elasticity

• Price Elasticity of Demand

• Price Elasticity of Supply

is one in which the

elasticity is greater than one, indicating a high responsiveness to

changes in price.

• elastic demand or elastic supply

• Inelastic demand or inelastic supply

elasticities that are less

than one, indicating low responsiveness to price changes.

• elastic demand or elastic supply

• Inelastic demand or inelastic supply

Unitary elasticities indicate proportional responsiveness of either

demand or supply

• True

• False

either the quantity

demanded (Qd) or supplied (Qs) changes by an infinite amount in

response to any change in price at all.

• Infinite elasticity or perfect elasticity

• Zero elasticity or perfect inelasticity

a percentage change in

price, no matter how large, results in zero change in quantity.

• Infinite elasticity or perfect elasticity

• Zero elasticity or perfect inelasticity