Question: Page 1 2 4 4 . 1 . What is the price elasticity of demand, and what are its determinants? Describe how to calculate the

Page 124
4.1. What is the price elasticity of demand, and what are its determinants?
Describe how to calculate the price elasticity of demand.
The price elasticity of
equals the percentage change in
divided by the percentage change in
. When the percentage change in the quantity demanded is larger than the percentage change in price, the demand is
.
demandthe quantity demandedcostsupplypriceelasti

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