Elasticity (OCR A-Level Economics): Flashcards

Responsiveness of demand/supply to changes in price, income, or other factors

Responsiveness of quantity demanded to a price change

$\frac{\% \Delta Q_d}{\% \Delta P}$

Elastic demand

Inelastic demand

$\frac{\% \Delta Q_d}{\% \Delta \text{income}}$

Luxury good

Inferior good

Necessity

$\frac{\% \Delta Q_d \text{ of Good A}}{\% \Delta P \text{ of Good B}}$

Substitutes

Complements

$\frac{\% \Delta Q_s}{\% \Delta P}$

$P \times Q$

TR increases