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Elasticity fill-in

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Elasticity fill-in

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economics
microeconomics
elasticity
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Shaner Adams
Shaner Adams
United States

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Elasticity fill-in

Elasticity fill-in

Shaner Adams
1

ball Unitary opposite responsiveness inelastic supply higher tennis absolute price quantity demand low elasticity lower supplied percentage greater price high three negative

Anyone who has studied economics knows the law of demand : a price will lead to a quantity demanded . What you may not know is how much lower the quantity demanded will be . Similarly , the law of supply states that a higher will lead to a higher quantity . The question is : How much higher ?

Elasticity is an economics concept that measures of one variable to changes in another variable . Suppose you drop two items from a second - floor balcony . The first item is a tennis ball . The second item is a brick . Which will bounce higher ? Obviously , the . We would say that the tennis ball has greater .
Both the demand and supply curve show the relationship between price and the number of units demanded or supplied . Price elasticity is the ratio between the change in the demanded ( Qd ) or supplied ( Qs ) and the corresponding percent change in . The price elasticity of is the percentage change in the quantity demanded of a good or service divided by the percentage change in the price . The price elasticity of is the percentage change in quantity supplied divided by the percentage change in price .

We can usefully divide elasticities into broad categories : elastic , inelastic , and unitary . Because price and quantity demanded move in directions , price elasticity of demand is always a number . Therefore , price elasticity of demand is usually reported as its value , without a negative sign . An elastic demand or elastic supply is one in which the elasticity is than one , indicating a responsiveness to changes in price . Elasticities that are less than one indicate responsiveness to price changes and correspond to demand or supply . elasticities indicate proportional responsiveness of either demand or supply .

Text adapted from https : / / openstax . org / books / principles - economics - 2e / pages / 5 - introduction - to - elasticity , https : / / openstax . org / books / principles - economics - 2e / pages / 5 - 1 - price - elasticity - of - demand - and - price - elasticity - of - suppl y

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