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Price Elasticity of Demand
LO1 6-3
Price Elasticity of Demand Formula
LO1 6-4
Total Revenue Test
LO2 6-5
Determinants of Price Elasticity of
Demand
• Substitutability
• More substitutes, demand is more elastic
• Proportion of income
• Higher proportion of income, demand is
more elastic
LO3 6-6
Determinants of Price Elasticity of
Demand
LO3 6-7
Price Elasticity of Supply
LO4 6-8
Price Elasticity of Supply
LO4 6-9
Price Elasticity of Supply
LO4 6-10
Price Elasticity of Supply
LO4 6-11
Es: The Immediate Market Period
Sm
Pm
P0
D2
D1
Q0
LO4 6-12
The Short Run
Ps
P0
D2
D1
LO4 Q 0 Qs 6-13
The Long Run
SL
Pl
P0
D2
D1
Q0 Ql
LO4 6-14
Cross Elasticity of Demand
LO5 6-15
Cross Elasticity of Demand
LO5 6-16
Income Elasticity of Demand
LO5 6-17
Income Elasticity of Demand
LO5 6-18
Income Elasticity Insights
LO5 6-19