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2 cards from this section. Quick, good the night before a test.
Define price elasticity of demand.
Think of how consumers react when prices change.
What does it mean if demand is elastic?
Consider the ratio of quantity change to price change.
What is the formula for calculating price elasticity of demand?
Remember that percentage changes in quantity and price are involved.
If a linear demand curve has elasticity of 1, what point does this correspond to?
Think about where demand meets changes in quantity.
Given a linear demand curve q = 30 - 2p, determine the elasticity at p = 5.
Utilize the slope - recall that elasticity changes with price.
If the price of oranges rises from $2 to $3 and the quantity demanded drops from 100 to 80, what is the elasticity of demand?
Express changes in both quantity and price clearly.
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