chapter 2 Flashcards
(16 cards)
law of demand …
Qd decreases when price increase
movement along demand curve when…
only price changed
shift in demand curve when …
other than price chnage \
shift right = mor ewilling to pay
left = less willing
law of supply
quantity increases when price increases
shift in supply when …
other than price changes
shift right = increase willingness of producers to offer good at same price
left = decrease willingness to offer good at same price
qd = qs is….
market equilibirum
price elasticity of demand
% change in quantity demanded by one additional unit of anoter good
formula for PED
delta y / delta x multiplied by x/y
or
derivative of y / deriv x multiplied by x/y
Eqp = 0 means…
perfectly inelastic demand
vertical line on graph
will pruchase no matter the price
Eqp from 0 to -1 means…
inelastic demand
insentivie to price
Eqp = -1 means…
unitary elastic demand
% increase in demand = % decrease in price
Eqp = -1 to infinity
elastic demand
demand sensitive to price
Eqp = infiinity means…
perfectly elastic demand
choke price
(a/b) price which quanitity demanded falls to 0
Eqp formula for constant formula
delta Q / delta P multiplied by P / Q
= -bP/Q
