The basic idea of elasticity—how a percentage change in one variable causes a percentage change in another variable—does not just apply to the responsiveness quantity supplied and quantity demanded to changes in the price of a product. Recall that quantity demanded (Qd) depends on income, tastes and preferences, the prices of related goods, and so on, as well as price. Similarly, quantity supplied (Qs) depends on factors such as the cost of production, as well as price. We can measure elasticity for any determinant of quantity supplied and quantity demanded, not just the price.
Elasticity in Areas Other Than Price
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- 2 - Income Elasticity of Demand
- 3 - Cross-Price Elasticity of Demand
- 4 - Elasticity in Labor and Financial Capital Markets
- 5 - Expanding the Concept of Elasticity
- 6 - Key Concepts and Summary
- 7 - Self-Check Questions
- 8 - Review Questions
- 9 - Critical Thinking Questions
- 10 - References
- View all as one page
1
of
10
- 1 -
- 2 - Income Elasticity of Demand
- 3 - Cross-Price Elasticity of Demand
- 4 - Elasticity in Labor and Financial Capital Markets
- 5 - Expanding the Concept of Elasticity
- 6 - Key Concepts and Summary
- 7 - Self-Check Questions
- 8 - Review Questions
- 9 - Critical Thinking Questions
- 10 - References
- View all as one page