Examples of elasticity

Price elasticity of demand measures the responsiveness of demand to a change in price. Price inelastic – a change in price causes a smaller % change in demand. Price elastic – a change in price causes a bigger % change in demand. Price inelastic demand We say a good is price inelastic, when an increase …

Read moreExamples of elasticity

Difference between Point and Arc Elasticity of Demand

When calculating elasticity of demand there are two possible ways.

  1. Point elasticity of demand takes the elasticity of demand at a particular point on a curve (or between two points)
  2. Arc elasticity measures elasticity at the midpoint between the two selected points:

Read moreDifference between Point and Arc Elasticity of Demand

Price Elasticity of Demand – Short and Long Run

higher-price-oil-elasticity-time-lag

Demand tends to be more price inelastic in the short-run as consumers don’t have time to find alternatives. In the long-run, consumers become more aware of alternatives. Price elasticity of demand measures the responsiveness of demand to a change in price. Demand is price inelastic if a change in price causes a smaller % change …

Read morePrice Elasticity of Demand – Short and Long Run

Item added to cart.
0 items - £0.00