What is elastic in microeconomics?
Understand the Problem
The question is asking for the definition and explanation of the concept of 'elasticity' in the context of microeconomics, which typically refers to how the quantity demanded or supplied of a good responds to changes in price or other factors.
Answer
The responsiveness of the quantity demanded of a good or service to changes in its price.
The final answer is the responsiveness of the quantity demanded of a good or service to changes in its price.
Answer for screen readers
The final answer is the responsiveness of the quantity demanded of a good or service to changes in its price.
More Information
In microeconomics, elasticity is a central concept used to understand how variables like price, income, or supply affect the demand of a product. It is calculated as the percentage change in quantity demanded divided by the percentage change in price.
Tips
A common mistake is confusing elastic and inelastic goods: elastic goods see a greater change in quantity when price changes, while inelastic goods see smaller changes.
Sources
- Elasticity: What It Means in Economics, Formula, and Examples - investopedia.com
- Elasticity (economics) - Wikipedia - en.wikipedia.org
- Elasticity – Introduction to Microeconomics - psu.pb.unizin.org
