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 in demand. This gives a low PED <1.
Demand is price elastic if a change in price causes a bigger % change in demand. This gives…

# elasticity

# Difference between Point and Arc Elasticity of Demand

When calculating elasticity of demand there are two possible ways.Point elasticity of demand takes the elasticity of demand at a particular point on a curve (or between two points)
Arc elasticity measures elasticity at the midpoint between the two selected points:(more…)

# Examples of elasticity

Price elasticity of demand measures the responsiveness of demand to a change in price. See: Price elasticity of demandPrice inelastic – a change in price causes a smaller % change in demand.
Price elastic – a change in price causes a bigger % change in demand.Examples of price inelastic demandWe say a good is price inelastic, when an increase in price causes a smaller % fall in demand, e.g. if price of petrol rises 40%, but…