Chapter 5 Part III -- Calculating Elasticity

by Elson Blunt on Jun 26, 2014

A simple calculation of elasticity using percentages. The equation is a ratio of the percentage change in quantity and price, with quantity in the numerator so that large elasticities come from large reactions to a small change in price. Straight demand curves have varying elasticities, with the elastic region at the top and the inelastic region at the bottom.

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