# Tag Info

1

the practices of assigning salaries and bonuses, etc, would be difficult to adjust in the short term (i.e. more inelastic), so they'd tend to stay the same, This might be true empirically (I am not an expert on CEO compensation), but if you are doing a test you have to follow assumptions in exercise (which will not always be realistic - undergraduate ...

0

Simple case is following: You decrese price by same % for usual and premium goods, than measure the demand. If both change in same ratios their elasticity is same, and so on. You can meauser the elasticity lag for both cases, when users start reacting to price change for both groups. You can measure behavior of users moving between groups (premium, usual) ...

2

It is correct that the higher the elasticity is the more flat the demand curve will be. A higher elasticity means that demand responds disproportionately more to change in prices. In fact an example of demand curve where elasticity $| \epsilon| = \infty$ would be a flat horizontal demand curve. The reason for this is that elasticity of demand tells you how ...

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