Elasticity summary

Elasticity summary

1. Strong bonds-leaders

   • Weak bonds- followers

2. PED- Measures the response of demand to change of price as when the price changes so does demand. %change in demand/%change in prise.

3. In-elastic=high level of consumer surplus

   • Elastic+Low consumer surplus

4. Inelastic of demand

   • Small price increase
   • Small proportion of income
   • Purchase cannot be postponed
   • Very few sub's
   • High on preference list
   • High level of income
   • Necessity

5. Elasticity of demand

   • Large price income
   • Large proportion of income
   • Purchase can be postponed
   • Large number of sub's
   • Low preference list
   • High level of income
   • Luxury goods

6. YED- relationship between a change on quantity demanded for goods and a change in real income. % change in demand/%change in income

7. Income elasticity charecteristics

   • Inferior goods
   • Luxury goods
   • Large increase income
   • Consumer income is low

8. Income in-elastic charecteristics

   • Necessities
   • Small increase in income
   • Consumer income is high

9. % change QD>% change p= Elastic

10. % change QD<Change P= Inelastic

11. % change QD=%change P= Inelastic

12. PED= Price Elasticity Demand

13. PES= Price Elasticity Of Supply

14. YED= Income elasticity of demand

15. XED= cross Elasticity of Demand

16. triangle=change

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