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Elasticity - Mind Map
Mind Maps have been produced to introduce topics and give students an overview of key topics being studied. The maps can be viewed as a whole page or, for those who prefer a more linear approach, as a text version.
View larger version of the mind map.
- Price Elasticity of Demand
- Ped = % Change in Qd / % Change in P
- If % Change Qd > % change P = Elastic
- If % Change Qd < % Change P = Inelastic
- If % Change Qd = % Change P = Unit Elasticity
- Cross Price Elasticity of Demand
- Rleationship between changes in the price of one good and the demand for another related good
- Substitutes - Positive relationship
- Complements - Negative Relationship
- Determinants of Elasticity
- Time Period
- Luxury or Necessity
- Proportion of Income
- Number of substitutes
- Addictive nature of good
- Income Elasticity of Demand
- Normal Goods
- Positive Relationship
- Demand rises as incomes rise
- Inferior Goods
- Demand Falls as income rises
- Inverse relationship
- Price Elasticity of Supply
- Ease with which producers can respond to price changes
- Pes = % Change in QS / % Change in P
- If % Change in QS > % Change in P = Elastic
- If % Change in QS < % Change in P = Inelastic
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