# Questions tagged [elasticity]

Elasticity is the measurement of how responsive an economic variable is to a change in another.

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### Elasticity of a function of two input variables [closed]

Could you please help me with a hint how to solve the following problem? I have to be able to explain it to a student, who studies economics in a university. Thank you.
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### Why does it make sense for Elasticity to be the ratio of a % change increase to a % change decrease? [duplicate]

So, elasticity, say the price elasticity of demand, is: $$\text{elasticity}=\frac{\text{% change in demand}}{\text{% change in price}}$$ So an elasticity of one corresponds to situations where a 1% ...
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### How would I calculate the quantity demanded of a product with price elasticity given and price change given? [closed]

"The price elasticity of apples is -0.5. When the price of apples is $2, consumers demand 500 apples a day. If the price of apples rises to$3, how many apples will be demanded?" I really ...
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### Why supply is more elastic at lower prices and more inelastic at higher prices?

In my economics book*, in the lesson explaining what price elasticity of supply is, it's written: In reality, supply curves are likely to be non-linear, so will have a different PES value at ...
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### Why do supply curves that start at the origin have a PES value of 1?

In my economics book*, in the lesson explaining what price elasticity of supply is, it's written: Any supply curve that starts at the origin has a PES value equal to 1. The theoretical outcome means ...
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### What is the proper way to read and/or express "price elasticity of demand"?

The natural language phrase such as square root of x for a function $Sqrt(x)$ precedes the input with the word of. When we talk of a bivariate function, such as $x/y$ aka $Ratio(x,y)$, we say simply ...
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### Finding own price elasticity/cross pirice elastcity

I am looking for a source where I can find the own price elasticity/cross price elasticity of public and private transport for the European countries and each continent. Does somebody know a credible ...
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### Are economic profits above normal for many firms in a perfectly-competitive increasing-cost industry?

In a perfectly-competitive constant-cost industry, all firms will have normal profits in the long run. This fact is very clear to me as the long run supply curve is perfectly elastic and hence each ...
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### What does the following mean: "supply has positive elasticity”?

What confuses me in particular is that I always thought of the concept of ‘elasticity’ with respect to something. That is, supply of x can be elastic with respect to y. Am I missing something?
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### Why does short run market supply become more elastic with more firms

I have heard a justification along the lines of this: The supply curve becomes flatter (more elastic) with more firms in the market, because a given increase in price calls forth more production when ...
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### Solving problem for optimal price (maximize profit) *attempt inside*

Let a demandfunction be defined as $D(p)=B-bp$, where $b,B>0$. A firm has some production cost, $c$, and can set the price $p$ under the constrain given by the Demand. What is the optimal price? ...
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### Do barriers to entry increase the (collective) market power of incumbent suppliers?

For example in the case of the labour market lower immigration means that low-skilled labour can ask higher wages or better conditions (other things equal). Low skilled labour may have even put the ...
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### How can I formulate price elasticity of demand equation when I want to add cross price elasticity?

I am trying to calculate the price elasticity of demand for a product where I used the equation log(volume) = elasticity * log(price) + seasonality dummies + trend index + CPI Here CPI is the consumer ...
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### Elasticity of intertemporal sustitution with composite CRRA function

In the usual CRRA $\frac{c^{1-\sigma}-1}{1-\sigma}$ function we have that the intertemporal elasticity of sustitution $\partial\frac{c_{t+1}}{{c_{t}}{\partial r}}$ is $\frac{1}{\sigma}$. But how can ...
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### Examples of bounded, positive, inverse demand curves

The three most common examples of demand curves I am aware of are \begin{align} Q&= b - aP,\\ Q&= bP^a,\\ Q&= b e^{-aP}\\ \end{align} The first being our classic linear demand curve, the ...
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### Price elasticity of demand of CES

Anyone would like to help me show the following ( or a book/paper reference would be a great help) " The price elasticity of demand is equal to $\sigma$ for the demand function of CES preference,...
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### Is saying that the demand is elastic or inelastic too oversimplified?

As we know that elasticity varies from infinity to zero as we move along a linear demand curve, then is it correct to label any demand curve elastic or inelastic as a whole?