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Ecomomics: Elasticity

            ï»¿1) Define the term price elasticity of demand and describe the three (3) price elasticity ranges. Describe the relationship between the price elasticity of demand and total revenues of a firm. Provide at least one example of an actual product or service as a reference point in your answer.
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             Microeconomics is the study of a section of the economy rather than the economy as a whole (which is macroeconomics).Microeconomics is more concerned with the allocation of scarce resources and the elasticity of consumers and producers at the level of households and firms.
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             Price elasticity is the responsiveness of the quantity demanded of a commodity to changes in its price; defined as the percentage change in quantity demanded divided by the percentage change in price. In other words, price elasticity of demand is a measure used in economics to show the responsiveness, or elasticity, of the quantity demanded of a good or service to a change in its price. As well, it gives the percentage change in quantity demanded in response to a one percent change in price. Price elasticity's are almost always negative, although at times accountants tend to ignore the sign even though this can lead to uncertainty. Only goods which do not conform to the law of demand have a positive PED. In general, the demand for a good is said to be  inelastic  when the PED is less than one which is known as absolute value. Changes in price have a relatively small effect on the quantity of the good demanded. The demand for a good is said to be  elastic  when its PED is greater than one, in absolute value. Changes in price have a relatively large effect on the quantity of a good demanded. To calculate the price elasticity of demand, you have to first calculate percent changes in quantity demanded and price. First you have to divide the change in price by the original price to find the percentage change in price.


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2. Price Elasticity

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5. Microeconomics: Land, Labor, Capital, and Entrepreneurship

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6. Market Supply and Demand

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7. Micro Economics

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8. Southwest AIrlines

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9. Effects of taxing Internet commerce

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