Elasticity Practice

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

REMINDERS:

E_d>1: ELASTIC

E_d=1: UNIT ELASTIC

E_d=<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