THE VARIETY OF SUPPLY CURVES

THE VARIETY OF SUPPLY CURVES Because the price elasticity of supply measures the responsiveness of quantity supplied to the price, it is reflected in the appearance of the supply curve. Figure 5 shows five cases. In the extreme case of a zero elasticity, as shown in...

THE ELASTICITY OF SUPPLY

THE ELASTICITY OF SUPPLY When we introduced supply in Chapter 4, we noted that producers of a good offer to sell more of it when the price of the good rises, when their input prices fall, or when their technology improves. To turn from qualitative to quantitative...

The Cross Price Elasticity of Demand

The Cross Price Elasticity of Demand The cross-price elasticity of demand measures how the quantity demanded of one good changes as the price of another good changes. It is calculated as the percentage change in quantity demanded of good 1 divided by the percentage...