definitions
formula
graphs
other
100
What does the law of demand state
price and quantity demanded have a negative causal relationship
100
What does delta represent
Change
100
What are the PED values for the 3 special cases?
1, 0, infinity
100
From whose perspective is revenue calculated?
Supplier
200
elasticity
Degree of responsiveness of something to a change in one of its determinants
200
What is % change in Qd?
((Q2-Q1) / Qd ) * 100
200
The graph has a horizontal line for which PED value?
PED = infinity
200
Does PED have a negative sign? Explain your answer.
No. P and Qd have an inverse relationship
300
Price elasticity demand
Degree of responsiveness of Qd to change in P ceteris paribus
300
What is PED using %?
%delta Qx --------------- % delta Px
300
This graph has a steep gradient for which PED values
0<PED<1
300
What is the formula for the slope of the PED
delta Qd -------- delta P
400
elastic demand
Qd is relatively responsive to P
400
What is the formula for PED using delta?
delta Qd ---------- *100 Qx ----------------------- delta P --------- *100 Px
400
What is an example of a good with inelastic demand
Insulin and other pharmaceutical needs
400
What happens to elasticity along the demand curve as P falls
It falls
500
perfectly inelastic good
Qd is completely unresponsive to P
500
What is the PED when: At $300 the Qd is 5000 At $255 the Qd is 6000
1.33
500
What does the rectangular hyperbola show?
change in Qd is proportional to change in P
500
Why is PED not constant even though its slope is?
The P/Q is variable in the forumla. deltaQd P ------- * --- delta P Qd
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