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4.5: Key Terms

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    Definitions

    Constant Unitary Elasticity
    When a given percent change in price leads to an equal percentage change in quantity demanded or supplied.
    Cross-Price Elasticity of Demand
    The percentage change in the quantity of good A demanded as a result of a percentage change in the price of good B.
    Elastic Demand
    When the elasticity of demand is greater than one, indicating a high responsiveness of quantity demanded to changes in price.
    Elastic Supply
    When the elasticity of supply is greater than one, indicating a high responsiveness of quantity supplied to changes in price.
    Elasticity
    An economics concept that measures the responsiveness of one variable to changes in another variable.
    Elasticity of Savings
    The percentage change in the quantity of savings divided by the percentage change in interest rates.
    Inelastic Demand
    When the elasticity of demand is less than one, indicating low responsiveness of consumers to price changes.
    Inelastic Supply
    When the elasticity of supply is less than one, indicating low responsiveness of producers to price changes.
    Infinite Elasticity
    The extremely elastic case where quantity changes by an infinite amount in response to any change in price; horizontal in appearance.
    Perfect Elasticity
    See infinite elasticity.
    Perfect Inelasticity
    See zero elasticity.
    Price Elasticity
    The relationship between the percent change in price and the corresponding percentage change in quantity demanded or supplied.
    Price Elasticity of Demand
    The percentage change in the quantity demanded of a good or service divided by the percentage change in price.
    Price Elasticity of Supply
    The percentage change in the quantity supplied divided by the percentage change in price.
    Tax Incidence
    The manner in which the tax burden is divided between buyers and sellers.
    Unitary Elasticity
    When elasticity equals one, indicating that a change in price results in a proportional change in quantity demanded or supplied.
    Wage Elasticity of Labor Supply
    The percentage change in hours worked divided by the percentage change in wages.
    Zero Inelasticity
    The highly inelastic case where a change in price results in no change in quantity; vertical in appearance.

    This page titled 4.5: Key Terms was last modified on Sat, 05 Sep 2026 20:37:40 GMT and is shared under a CC BY 4.0 license and was authored, remixed, and/or curated by Ravjeet Singh.

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