Elasticity Practice

Use the graph and data below to answer the questions regarding elasticity.

REMINDERS:

Ed>1--ELASTIC

Ed=1--UNIT ELASTIC

Ed=<1--INELASTIC

The following is the formula for calculating percentage change:

The TOTAL REVENUE (P X Q) is another way to measure elasticity:

If price increases and total revenue decreases=ELASTIC

If price decreases and total revenue increases=ELASTIC

If price changes and total revenue is unchanged=UNITARY ELASTIC

If price increases and total revenue increases=INELASTIC

If price decreases and total revenue decreases=INELASTIC

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