Elasticity notes
24 notes by 11 users
This Elasticity page on GoConqr gathers notes on price, income and cross elasticity, including formulas and worked examples. The collection is for school students, university students and professional candidates practising elasticity calculations, and teachers looking for study material. There are over 20 notes spanning school and university study. Choose a note to get started.
Notes
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Economics - Elasticity Elasticity - Various Elastic Demand: A good with many close substitutes tends to have an elastic demand. Because buyers are easily able to switch between substitutes, they are relatively sensitive to price changes. In...
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Untitled PED a measure of how quantity demanded of a good responds to a change in pricePED: Percentage change in quantity demanded/percentage change in pricePED usually negative as demand falls as price increases for most good...
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3.4 Price elasticity of supply (PES) Price elasticity of supply (PES):-a measure of the responsiveness of the quantity of a good supplied to changed in its price-calculated along a given supply curve-if there is a large responsiveness of quantity supplie...
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Factors that Affect PED Complementary GoodsWhen you have two complementary goods, the cheaper one of the two will have inelastic demand. Take, for example, shoelaces and shoes. Shoelaces are relatively inelastic, as they are seen as far chea...
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Untitled price elasticity of demand to raise revenue you can both raise or lower the price, it depends on how sensitive the consumers will be the law of demand: more of a good will be bought the lower its price, le...
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3.1 Price elasticity of demand (PED) 3.1 Price elasticity of demand (PED) Price elasticity of demand (PED) : It's the measure of the responsiveness of the quantity of a good demanded to the change of the price . PED is calculated along a demand curv...
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Income Elasticity of Demand Income Elasticity of Demand The Income Elasticity of Demand (YED) of a good measures the responsiveness of the quantity demanded of a good to a change in incomeIn other words, it measures how much demand would r...
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Worked Examples for Elasticity Formulas QuestionA consumer buys 5 units of a good per week when their weekly income is 250.When their weekly income increases to 280, they buy 7 units of the good.Calculate the income elasticity of demand for this good. Worki...
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Cross Elasticity of Demand Why?Use the example of Pepsi and Coke for our substitute goods.When the price of Pepsi goes up, Coke seems cheaper in comparison, so demand for Coke goes up.This increase in demand for Coke is as a result of the incre...
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Calculating PED
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3.2 Cross-price elasticity of demand (XED) Cross-price elasticity of demand (XED):-a measure of the responsiveness of a demand for one good to change in the price of another good involving the demand curve shifts-provides information on whether demand increase...
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Types of Elasticity Goods have a unitary elastic demand when a percentage change in the demand for the good is equal to the percentage change in the price of the good A good with a unitary elastic demand would have an elasticity coeffici...
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Ch5: Elasticity and its application Elasticity measures how much one variable responds to changes in another variable a numerical measure of the responsiveness of Qd or Qs to one of its determinants. Price Elasticity of Demand� Price elasticity of...
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Who Finds PED Useful? A monopolist, who has complete control of the market, can use their knowledge of PED to fix a market price that they know will not have an overly negative effect on quantity demanded so that they, too, can maximise re...
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3.3 Income elasticity of demand (YED) 3.3 Income elasticity of demand (YED) Income elasticity of demand (YED) : It's a measure of the responsiveness of the quantity demanded of a product to the change of the income of the customer , and it involves d...
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3.2 Cross-price elasticity of demand (XED) 3.2 Cross-price elasticity of demand (XED) Cross-price elasticity demand : It's a measure of the responsiveness of the quantity demanded of a product to the change in the price of other product and it involves demand ...
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3.3 Income elasticity of demand (YED) Income elasticity of demand (YED):-measure of the responsiveness of demand to changes in income, involving demand curve shifts-provides information on the direction of change of demand given a change in income and on ...
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Formulas for Income Elasticity of Demand & Cross Elasticity of Demand
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Introduction to Price Elasticity of Demand Price Elasticity of Demand The Price Elasticity of Demand of a good measures the responsiveness of the quantity demanded of a good to a change in its priceIn other words, it measures how much demand would fall if the ...
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Formulas PED = % change QDa - correlation % change PaYED = % change QDA + correlation for nor...
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Cross (XED) and Income(YED) -Cross elasticity of demand is the degree of responsiveness of demand of one good to changes in the price another good- If XED is positive it means the goods are substitutes, the greater the number the closer the two ...
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Untitled Income Elasticity of Demand Price Elasticity of Demand Measures the responsiveness of quantity demanded to a change in price. If the coefficient is greater than 1, it is an elastic good. If the coefficient is less tha...
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INCOME ELASTICITY OF DEMAND (YED)
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SUMMARY OF ELASTICITIES
More Elasticity resources
About elasticity notes
GoConqr OriginalUsing elasticity notes
The notes on this page cover several ways to measure elasticity. Cross Elasticity of Demand uses substitute goods to explain how demand for one good responds to a change in another good’s price. Income Elasticity of Demand looks at changes in income, while another note covers price elasticity of supply.
For a starting point, read Introduction to Price Elasticity of Demand, then use Calculating PED to focus on the formula. Worked Examples for Elasticity Formulas gives you a chance to follow a calculation using a change in income.
Turn notes into practice
After reading a note, write down the measure and formula in your own words. Revisit the worked example and compare your approach with the note. If you want a different way to review, the Elasticity unit page also has mind maps and flashcards; switch to a quiz when you are ready to practise without the notes in front of you.
Pick a note and follow it with a format that suits your next step.
Frequently asked questions
Which elasticity note should I start with?
Start with Introduction to Price Elasticity of Demand if you want to focus on price elasticity of demand. Follow it with Calculating PED for the formula. Worked Examples for Elasticity Formulas offers a calculation involving a change in income, so you can then look at a different measure.
What topics do the notes cover?
The collection includes notes on price, income and cross elasticity of demand, as well as a note on price elasticity of supply. There are also notes on types of elasticity, factors that affect PED, formulas and worked examples. Cross Elasticity of Demand uses substitute goods to illustrate its topic.
Are these notes free to use?
Yes. Every note listed here is free to open and study without an account. The resources were made by GoConqr users, not by GoConqr. A free account also lets you make your own notes, quizzes, mind maps and flashcards, and save your quiz scores.
Who are these notes suitable for?
The collection spans school and university study and can also support professional candidates practising elasticity calculations. Teachers can use it to find study material on particular measures and formulas. Titles such as Types of Elasticity and Worked Examples for Elasticity Formulas help you choose a starting point.