Is the notion of aggregate elasticity of demand applicable in a market for slightly differentiated products? Intuitively, it seems like it should. If market output can be expressed in a single number (for example, the number of cars in a market of cars differentiated by color), then if the price of each of the products is increased by the same small percentage, you could calculate an aggregate elasticity. Is this an accepted concept in economics?



Your Answer

By clicking “Post Your Answer”, you agree to our terms of service and acknowledge you have read our privacy policy.

Browse other questions tagged or ask your own question.