# Questions tagged [elasticity]

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

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### Calculating Price Elasticity of Demand

Hi I was given the following price vs quantity values. ...
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### Elasticity when the demand function is given

Given the demand function, $q = kp^{-\epsilon}$, how do I calculate the elasticity? As a result, I do know that the elasticity when the demand function is in this form is $- \epsilon$. But I'd ...
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### How to Calculate Price Elasticity of Demand When Perfectly Elastic?

When we have perfect elasticity, the demand curve is a horizontal line and the elasticity of demand coefficient is equal to infinity. How do we arrive at a solution equal to infinity? We know that ...
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### Demand Curve Price not perfectly elastic

I'm trying to make the argument that our Sales go up when prices for all our Products are 30% off. Which I believe should be our new Regular Price. but our Demand Curve doesn't support this. Should I ...
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### What's an example of a resource, raw material that has become scarce?

I'm interested in the elasticity price demand that predicts that as a resource becomes more scarce, it gets more expensive. Regarding oil price this isn't clear. Is there an example of a resource ...
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### Should Company B enter the market in the following cases

Say Company A has a monopoly producing product E, at a constant marginal cost of $3$ USD. Say the ideal number of units produced is $1$ unit which produces a profit of $2$ USD (=$P_{A}$). Next, ...
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### Is there a possibility to have an inferior good (x) in a utility function where x & y have 0 cross elasticity?

A question I got on an exam that I think I messed up on: If we have cross elasticity of 0 (x & y are independent), can x be an inferior good? I answered with a yes. Am I wrong?
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### Elasticity and logarithms

Let's consider a relationship between $y$ and $x$, $y = a x^b$. Taking log on both sides, we have $$\log y = \log a + b \log x$$ Now, my textbook, Nicholson and Snyder's Basic Principles and ...
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### How to interpret Employment Elasticity in this text?

In this VoxEU text, «Promising ideas for future research on the employment effects of minimum wages », how do I interpret the elasticity of employment? I would think of it as percentual change in ...
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### Why are the formulas for price elasticity of supply and demand the same in intro microeconomics?

I get that they are both gauging responsiveness, but I don't particularly understand why they are the same formula.
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### What's the term for elastic pricing?

What I've called "elastic pricing", has a true economics name that I believe I once heard. Here's the notion: I walked into a gas station to buy a fountain drink. I only brought a dollar with me, but ...
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### How are elasticity of demand, marginal revenue, and total revenue connected?

I am completely new to economics, and am looking at some old exam papers. The question is as following: "In a normal marked, where there is a negative correlation between quantity and price, which of ...
Given the following 3 equations: $$Y^*_t=100+3t \\ Y_t = Y_t^* (1+(0.2 (\sin t)) \\ B_t=B_t^* (1+(0.4 (\sin t)) \\$$ And take B* to be the following, but is unknown: $$B_t^*= \alpha Y_t^* \\$$ I'...