CHAPTER 3
ELASTICITY OF
DEMAND
AND
SUPPLY 1
, Topic Learning
Outcome
At the end of this topic, student should be
able:
1.To define price elasticity, income elasticity and
cross elasticity of demand
2.To measure and apply price elasticity of
demand
3.To measure and apply income elasticity of
demand
4.To measure and apply cross elasticity of
demand
2
, Elasticity
of Demand
3
, Elasticity of Demand
Definition
Elasticity of demand refers to the degree of
responsiveness of qty demand to a change in
price (PED), a change in prices of substitutes and
complements(CED) and a change in income (IED).
Types of elasticity
Price elasticity of demand (PED)
Cross elasticity of demand (CED)
Income elasticity of demand (IED)
4
ELASTICITY OF
DEMAND
AND
SUPPLY 1
, Topic Learning
Outcome
At the end of this topic, student should be
able:
1.To define price elasticity, income elasticity and
cross elasticity of demand
2.To measure and apply price elasticity of
demand
3.To measure and apply income elasticity of
demand
4.To measure and apply cross elasticity of
demand
2
, Elasticity
of Demand
3
, Elasticity of Demand
Definition
Elasticity of demand refers to the degree of
responsiveness of qty demand to a change in
price (PED), a change in prices of substitutes and
complements(CED) and a change in income (IED).
Types of elasticity
Price elasticity of demand (PED)
Cross elasticity of demand (CED)
Income elasticity of demand (IED)
4
