# Questions tagged [elasticity]

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

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### how is output elasticity different from marginal product of a factor input?

marginal product has been defined as the addition to total product given the employment of one more unit of a factor input. output elasticity has been defined as the percentage change in output given ...
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### Inequality and effect on pricing

Suppose there’s an island that for whatever reason has a finite amount of US Dollars; 1000 residents live on the island and use this fixed amount of currency to exchange goods and services. Suddenly, ...
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### What point am I calculating the PED (Price Elasticity of demand)

I'm at a very basic level of economics (highschool), so what I write may not be very coherent, i'm just a bit confused and I can't get any book or source to awnser the question I have. See, the ...
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### Price elasticity of demand/supply following tech change

Is the answer (b) ? I found the two equilibrium prices before and after the change by doing Q^D = Qs1, Q^D = Qs2. Before the change, I get for the supply side : P = 15 and Q = 5, giving me a price ...
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### Elasticity computations and revenue

I would have appreciated some help in this issue. I have a demand schedule that looks like this ...
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### Price elasticity of demand coefficient

I am working on the following question: AS price increases along a straight line demand curve, will the price elasticity of demand coefficient increase, decrease or remain unchanged? The answer states ...
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### Elasticity computation

Suppose that we have the following regression: $$ln (h) = e_{0} + e_{1} ln (w) + u$$. Isn't elasticity $e_{1}$? in other words: $\frac{\delta ln (h)}{\delta ln (w)}$? I am a bit confused since I have ...
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### Why don't producers of goods with inelastic demand refuse to increase supply?

I'm reading Paul Samuelson's Economics (19th edition, 2009). In page 71, the Paradox of the Bumper Harvest is introduced. According to the paradox, an increase in food supply from a good harvest ...
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### Is the price elasticity of a product equal to the sum of all cross-price elasticities of demand for that product? Why?

I encountered the claim stated in the title, without it being further substantiated. I'm looking for some elaboration on it, assuming it's true. Also on an intuitive level.
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### Why is the demand curve inelastic for essential items?

Elasticity refers to the percent change in quantity with respect to the percent change in price. Elastic means that the percent change in quantity is greater than the percent change in price. ...
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### Price Elasticiyt of Demand & (AR - MR)

I have the following question: Using this equation: $MR = P(1+\frac{1}{ε})$ and the attached graph. How does the vertical distance between the demand curve and MR curve at a given level of output ...
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### Different methods to calculate price elasticity

I was testing different methods to calculate price elasticities in simple theoretical scenarios and I encountered a seemingly discrepancy between two very popular methodologies. Methodology 1: use the ...
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### Elasticity calculation

I have a utility function depending on consumption and leisure, $u(c, 1-h) = log(c) + Alog(1-h)$ subject to $c = wh + I$, where $w$ is wage, $I$ is income, $h$ is hours worked. I set up the ...
Cobb-Douglas utility functions assume price elasticity of $-1$ and income elasticity of $1$. Are there any utility functions with two goods that lead to a demand function, where you have the choice of ...