2.2+-+Elasticities

=2.2 - Elasticities=

__**Price Elasticity of Demand (PED)**__

 * Definition –


 * Formula -


 * Possible range in values -


 * Diagrams illustrating the range of PED values -


 * Varying elasticity along a straight-line demand curve -


 * Determinants of PED –

__**Cross Price Elasticity of Demand (XED)**__

 * Definition –


 * Formula –

__Complement goods and substitute goods powerpoint by Hyun Bin Lee__
 * Significance of the sign with respect to complements and substitutes

__ **I****ncome Elasticity of Demand (YED)**__

 * Definition –


 * Formula –


 * Normal goods –


 * Inferior goods –

__**Price Elasticity of Supply (PES)**__

 * Definition


 * Formula


 * Possible range of values


 * Diagrams illustrating the range of values of PES


 * Determinants of PES

__**Applications of concepts of elasticity**__

 * PED and business decisions: effect of price changes on total revenue –


 * PED and taxation


 * Cross-elasticity of demand: relevance for firms –


 * Significance of income elasticity for sectoral change as growth occurs


 * Primary –


 * Secondary –


 * Tertiary –

__**Taxation and Elasticities**__

 * Flat rate and ad valorem taxes


 * Incidence of taxes and subsidies on the producer and consumer


 * Implications of elasticity of supply and demand for the incidence of taxation