Elasticity Review

After a price increase, each unit sold sells at a higher price, which tends to raise revenue

Measure of the responsiveness of the quantity of a good supplied to the price of that good

Price elasticity of demand is, in strictly mathematical terms, a negative number.

After a price increase, fewer units are sold, which tends to lower revenue

The price elasticity of demand tends to _ as consumers have more time to adjust to price change

When a tiny increase or reduction in price will lead to very large changes in quantity supplied

If demand for a good is ________, a higher price increases total revenue.

When the price elasticity of supply is zero

When the price elasticity of demand is greater than 1

The price elasticity of supply tends to be ____ when inputs are readily available

The price elasticity of demand tends to be ___ if there are no close substitutes.

When the price elasticity of demand is less than 1

The ratio of the percent change in the quantity demanded to the percent change in the price

when the price elasticity of demand is infinite

zero price elasticity of demand

price elasticity of demand is exactly 1

When the income of demand is ________, the good is a normal good.

Measure of how much the demand for a good is affected by changes in consumers' income

When demand is _______, the two effects exactly balance; so a fall in price has no effect on TR

Price elasticity tends to be _______ if there are other readily available similar goods.

if the income elasticity of demand for the good is greater than 1, the good is

When two goods are complements, the cross-price elasticity is __________

If the income elasticity of demand for that good is positive but less than 1, the good is

When two goods are substitutes, the cross-price elasticity of demand is ___________

When the income elasticity of demand is _______, the good is an inferior good.

If demand for a good is _______, an increase in price reduces total revenue.

Measures the effect of change in one good's price on the quantity demanded of the other good

When demand is ______, the price effect dominates the quantity effect; fall in price reduces TR

A positive percent change in price leads to a negative percent change in the quantity demanded

A negative percent change in price leads to a negative percent change in the quantity demanded

The price elasticity of supply tends to grow _____ as producers have more time to respond to PC

When demand is __, the quantity effect dominates the price effect; a fall in price increases TR

If demand for a good is _______, an increase in price does not change total revenue.

The price elasticity of demand tends to be _ when spending on a good is a small share of income

The price elasticity of demand tends to be ____ if the good is a luxury

calculate changes in a variable compared with the average of the starting and final values