Concepts econ

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ECON 121

ELASTICITY: 1.- Flexibility.
2.- Price elasticity of demand measures the percentagechange in quantity
Demanded caused by a percent change in price.

DEMAND ELASTICITY: refers tohow sensitive the demand for a good is to changes in other economic variables. Demand elasticity is a measure of how much the quantity demanded will change if another factor changes
INCOME ELASTICITY:- A measure of the relationship between a change in income and a change in quantity of a good demanded.

SUPPLY ELASTICITY: The degree to which a price change for an item results from aunit change in supply. Supply elasticity is equal to percent change in quantity divided by percent change in price.

PRODUCTION COSTS: The change in total cost that comes from making or producingone additional item. The purpose of analyzing marginal cost is to determine at what point an organization can achieve economies of scale.

The elasticity measures the responsiveness of thequantity of cars sold at the price variation
thereof, or in the second case the sensitivity of GDP to changes in interest rates. That is why the
elasticity can understand or define as the percentagechange of a variable X in relation to a
variable Y. If the percentage change in the dependent variable Y is greater than the independent
variable X, said that the relationship is elastic because thedependent variable and varies more
than the variable X. On the contrary, if the percentage change in the variable X is greater than Y,
the relationship is inelastic.

In other hand, incomeelasticity is the relationship between income and purchasing power. If
income increases the purchasing power is higher and must have control to not spend on luxuries.
The planned cost the...