Econ- Section 1 (2) Flashcards Preview

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Flashcards in Econ- Section 1 (2) Deck (9)
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1

Elasticity can also be described as

Responsive or sensitive

2

Change of price changes...

Quantity Demanded NOT Demand

3

Direction of curve on an increase

Right

4

Direction of curve on decrease

Left

5

Law of Supply

Increase price and quantity supply goes up

6

Unitary Elastic

|E| = 1
Raising or lowering price has little effect on TR

7

Elastic

|E| > 1
Raise Price: decrease TR
Lower Price: increase TR

8

Inelastic

|E| < 1
Raise Price: increase TR

9

3 Factors that affect elasticity

Availability of Substitutes
% of consumer's budget
Time period to make a decision