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Questions and Answers
What does a perfectly elastic supply curve represent?
What does a perfectly elastic supply curve represent?
What does a perfectly inelastic supply curve depict?
What does a perfectly inelastic supply curve depict?
A vertical line reflecting a situation in which a price change has no effect on the quantity supplied.
What defines a unit-elastic supply curve?
What defines a unit-elastic supply curve?
A percentage change in price causes an identical percentage change in quantity supplied; the elastic value equals 1.0.
The measure of how demand changes in relation to consumer income is known as the ______.
The measure of how demand changes in relation to consumer income is known as the ______.
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What is the cross-price elasticity of demand?
What is the cross-price elasticity of demand?
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Study Notes
Elastic Supply Curves
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Perfectly Elastic Supply Curve: Characterized by a horizontal line; any decrease in price leads to a quantity supplied of zero. Indicates infinite elasticity (elasticity value = ∞).
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Perfectly Inelastic Supply Curve: Represented by a vertical line; price changes do not affect the quantity supplied at all, indicating total inelasticity.
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Unit-Elastic Supply Curve: A straight line from the origin showing that a percentage change in price results in an identical percentage change in quantity supplied. The elasticity value in this case equals 1.0.
Elasticity in Demand
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Income Elasticity of Demand: Measured by the percentage change in demand relative to the percentage change in consumer income. Normal goods have a positive elasticity value, while inferior goods have a negative elasticity value.
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Cross-Price Elasticity of Demand: Assessed by the percentage change in the demand for one good due to the percentage change in the price of another good, indicating how goods are interrelated in terms of demand.
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Description
Test your knowledge of the Elastic Supply Curve with these flashcards from Chapter 6. Each card presents key concepts including perfectly elastic, perfectly inelastic, and unit-elastic supply curves. Perfect for anyone looking to reinforce their understanding of supply elasticity in economics.
