Elasticity Flashcards
(16 cards)
When the demand is elastic…
A decrease in price increase the quantity sold more and the total revenue increase
When the demand is inelastic…
A decrease in price causes quantity sold to decrease more and total revenue decreases
When the demand is inelastic…
When a decrease in price does not change the total revenue
The cross elasticity of demand for a substitute is?
Positive
The cross elasticity of demand for a complement is?
Negative
If the income elasticity of demand is greater than 1…
The demand is income elastic and the good is a normal good
If the income elasticity of demand is greater than zero but less than 1 …
Demand is income inelastic and the good is a normal good
If the income elasticity of demand is less than zero…
The good is an inferior good
Momentary supply is…
Perfectly inelastic
Short run supply is
Somewhat Elastic
Long run supply is
The most Elastic
The price elasticity of demand depends on
Neither the units used to measure price nor the unites used to measure quantity
Demand is inelastic if
A leftward shift in the supply curve raises total revenue
The elasticity of a vertical demand curve is
Zero elastic
The elasticity of a horizontal demand curve is
Perfectly elastic
The elasticity of a curved demand curve is
Init elastic
