Elasticity

Elasticity measures the change in the market when there is a change in price.  There are four types of elasticity we will study:

Price Elasticity of Demand= %Change Demand/%Change Price
     
    Inelastic= 0< Elasticity<1
    Unit Elastic= 1
    Elastic= Elasticity>1

Income Elasticity
    Normal Goods
    Inferior Goods
Cross Elasticity
    Compliments
    Substitutes
Elasticity of Supply

8/29/13:  HW  Read pages 52-59

9/3/13: HW Read pages 59-65