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| Question | Answer |
| Percentage change | new value - old value DIVIDED by old value x 100 |
| Price elasticity of demand | Refers to how much demand will change when there is a change in price |
| Price elasticity of demand formula | % change in quantity demanded DIVIDED by % change in price |
| Price elasticity = 0 | Perfectly inelastic = no change in demand no matter what the price |
| Between 0 - 1 | Inelastic - total revenue will fall |
| Above 1 | Elastic - total revenue will rise if prices are lowered |
| Income elasticity of demand | Refers to how demand changes when there is a change in income |
| Income elasticity of demand formula | % change in quantity demanded DIVIDED by % change in income |
| Cross price elasticity of demand | Examines the demand for one product when the prices of another changes (subsitutes) |
| Cross price elasticity of demand formula | % change in quantity demanded for good A DIVIDED by % change in price of good B |
| Price elasticity of supply | Refers to the responsiveness of supply to changes in the price level |
| Price elasticity of supply formula | % change in quantity supplied DIVIDED by % change in price |
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