/ /Price Elasticity of Demand
Cross elasticity of demand - Wikipedia
In the chapter that introduced the model of demand and supply, we saw that an inferior good is one for which demand falls when income rises. It is likely to be a good that people do not really like very much. When incomes are low, people consume the inferior good because it is what they can afford. As their incomes rise and they can afford something they like better, they consume less of the inferior good. When the price of an inferior good falls, two things happen:
Income elasticity of demand - Wikipedia
Because each consumer’s response to a price change depends on the sizes of the substitution and income effects, these effects play a role in determining the price elasticity of demand. All other things unchanged, the larger the substitution effect, the greater the absolute value of the price elasticity of demand. When the income effect moves in the same direction as the substitution effect, a greater income effect contributes to a greater price elasticity of demand as well. There are, however, cases in which the substitution and income effects move in opposite directions. We shall explore these ideas in the next section.
Price Elasticity of Demand (PED) - Investing Answers
If the quantity demanded changes a when prices change a little, a product is said to be . This often is the case for products or services for which there are many alternatives, or for which consumers are relatively price sensitive. For example, if the price of Cola A doubles, the quantity demanded for Cola A fall when consumers switch to less-expensive Cola B.
Price Elasticity of Demand [Mackinac Center]
When there is a small change in demand when prices change a lot, the product is said to beinelastic. The most famous example of relatively demand is that for gasoline. As the price of gasoline increases, the quantity demanded doesn't decrease all that much. This is because there are very few good substitutes for gasoline and consumers are still willing to buy it even at relatively high prices.
IB Economics notes on 2.2 Cross price elasticity of demand (XED)
It is also a sensitivity of quantity towards changes of price and it is measured using the elasticity concept with a diagram of demand and supply curve.