Log out Go to App
Go to App

Learning Materials

Features

Discover

Chapter 5: Q.10 (page 130)

What is the formula for calculating elasticity?

Short Answer

Expert verified

Price Elasticity of Demand = %of the change in quantity demanded /%of the change in price.

Step by step solution

01

Definition

Elasticity of demand :

The degree to which demand changes in response to changes in another economic component, such as price or income, is referred to as elasticity of demand. Demand can be elastic, inelastic or unitary elastic.

02

Explanation

Price elasticity is calculated by the ratio of the proportionate change in quantity demanded and proportionate change in price.

PriceElasticityofDemand=%changeinquantitydemanded%changeinprice

Unlock Step-by-Step Solutions & Ace Your Exams!

  • Full Textbook Solutions

    Get detailed explanations and key concepts

  • Unlimited Al creation

    Al flashcards, explanations, exams and more...

  • Ads-free access

    To over 500 millions flashcards

  • Money-back guarantee

    We refund you if you fail your exam.

Start your free trial

Over 30 million students worldwide already upgrade their learning with Vaia!

One App. One Place for Learning.

All the tools & learning materials you need for study success - in one app.

Get started for free

Most popular questions from this chapter

Why is the demand curve with constant unitary elasticity concave?

From the data in Table 5.5 about the demand for smartphones, calculate the price elasticity of demand from point B to point C, point D to point E, and point G to point H. Classify the elasticity at each point as elastic, inelastic, or unit elastic.

Economists define normal goods as having a positive income elasticity. We can divide normal goods into two types: Those whose income elasticity is less than one and those whose income elasticity is greater than one. Think about products that would fall into each category. Can you come up with a name for each category?

From the data in Table 5.6 about the supply of alarm clocks, calculate the price elasticity of supply from point J to point K, point L to point M, and point N to point P. Classify the elasticity at each point as elastic, inelastic, or unit elastic.

The equation for a demand curve is P = 48 – 3Q. What is the elasticity in moving from a quantity of 5 to a quantity of 6?
See all solutions

What do you think about this solution?

We value your feedback to improve our textbook solutions.

Study anywhere. Anytime. Across all devices.

Sign-up for free