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    Concept of Elasticity: Eleonor D. Aguilando

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    Jouhara San Juan
    Elasticity measures the responsiveness of one variable to changes in another variable. It is used to describe the steepness of curves and is calculated by taking the percentage change in one variable divided by the percentage change in another variable. Demand is elastic if the elasticity value is greater than 1, inelastic if it is less than 1, and unit elastic if it equals 1. Elasticity can be used to compute the responsiveness of quantity to changes in price.

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    Concept of Elasticity: Eleonor D. Aguilando

    Uploaded by

    Jouhara San Juan
    26 views14 pages
    Elasticity measures the responsiveness of one variable to changes in another variable. It is used to describe the steepness of curves and is calculated by taking the percentage change in one variable divided by the percentage change in another variable. Demand is elastic if the elasticity value is greater than 1, inelastic if it is less than 1, and unit elastic if it equals 1. Elasticity can be used to compute the responsiveness of quantity to changes in price.

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    concept-of-elasticity

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    Elasticity measures the responsiveness of one variable to changes in another variable. It is used to describe the steepness of curves and is calculated by taking the percentage change in one variable divided by the percentage change in another variable. Demand is elastic if the elasticity value is greater than 1, inelastic if it is less than 1, and unit elastic if it equals 1. Elasticity can be used to compute the responsiveness of quantity to changes in price.

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    © All Rights Reserved
    Download as PPTX, PDF, TXT or read online from Scribd
    Download as pptx, pdf, or txt
    26 views14 pages

    Concept of Elasticity: Eleonor D. Aguilando

    Uploaded by

    Jouhara San Juan
    Elasticity measures the responsiveness of one variable to changes in another variable. It is used to describe the steepness of curves and is calculated by taking the percentage change in one variable divided by the percentage change in another variable. Demand is elastic if the elasticity value is greater than 1, inelastic if it is less than 1, and unit elastic if it equals 1. Elasticity can be used to compute the responsiveness of quantity to changes in price.

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    © All Rights Reserved
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    Download as pptx, pdf, or txt
    of 14

    CONCEPT OF

    ELASTICITY
    ELEONOR D. AGUILANDO
    ELASTICITY

    Elasticity is the concept economists use to


    describe the steepness or flatness of curves
    or functions.
    In general, elasticity measures the
    responsiveness of one variable to changes
    in another variable.
    Elasticity slide 2
    Elasticity slide 3
    Elasticity slide 4
    Elasticity slide 5
    Elasticity slide 6
    Elasticity slide 7
    Elasticity slide 8
    Elasticity slide 9
    Price Elasticity Formula
    % change in Q
    Elasticity =
    % change in P

    change in Q
    % change in Q = times 100
    average Q

    % change in p = change in P times 100


    average P
    Elasticity slide 10
    MORE ELASTICITY
    QUANTITY PRICE P
    COMPUTATIONS
    0 10 14
    1 9 12
    Compute elasticity between
    2 8 10
    prices of $9 and $8.
    3 7 8
    4 6 6
    5 5 4
    6 4 2
    7 3 0 Q
    8 2 0 2 4 6 8 10 12 14
    9 1
    10 0
    Elasticity slide 11
    The % change in Q =

    The % change in P =

    Therefore elasticity =

    Elasticity slide 12
    Now we try different prices
    QUANTITY PRICE
    0 10
    P
    1 9 14
    2 8 12 Compute elasticity between
    3 7 10 prices of $3 and $2.
    4 6 8
    6
    5 5
    4
    6 4
    2
    7 3 Q
    0
    8 2 0 2 4 6 8 10 12 14
    9 1
    10 0
    Elasticity slide 14
    TERMS TO LEARN
    Demand is ELASTIC when the numerical value of
    elasticity is greater than 1.
    Demand is INELASTIC when the numerical value of
    elasticity is less than 1.
    Demand is UNIT ELASTIC when the numerical
    value of elasticity equals 1.

    Elasticity slide 16

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