Econmics and govern... G... LO Juliana Veleno V X File Hom Insert Draw Desic Layou Refer Mailit Revie View Hel C platform.virdocs.com/read/2124215/120/#/4/2[P70010... Q 2 * Paused Inst 250 . . . A E A O Paste Font Paragraph Styles Editing Adobe e' eConcordia - Edit A... C MyConcordia - Con.. All Bookmarks Dictat Acrobat E Q T : Clipboard Styles Voice = ORedShelf. eReader Phil 210 The measurement of price elasticity The importance of elasticity is illustrated in Figure 4-1 0. The two parts of the figure each Notes & start with the same equilibrium, and then we see the same leftward shift in the supply curve. In Figure 4.1, we were able to say that the demand curve in part I sho Highlights But the two demand curves are different, and so the sizes of the changes in equilibrium price and quantity are also different. changes Than the demand curve in part II because two conditions we E drawn on the same scale. Second, the initial equilibrium prices and q Flashcards parts of the figure. Let's see why these conditions matter. Figure 4-1 The Effects of a Supply Shift with Two Econ 201 First, By drawing both figures on the same scale, we saw that the der Copied content Different Demand Curves actually did have the larger absolute slope. The slope of a demand cu price must change to cause a unit change in quantity demanded. If w different scales, we could have concluded nothing about which dema Math 206 slope. Sa Second, because we started from the same price, quantity equilibrium not need to distinguish between percentage changes and absolute ch Price Price quantities are the same in both cases, The larger absolute change is a period. However, when we want to deal with different initial price, q De decide whether we are interested in absolute or percentage changes .Di To see why the difference between absolute and percentage change and quantity demanded for three different products: Cheese, T-shirts 21 21 20 information Is shown in Table 4.1. Should we conclude that the dema Quantity Quantity responsive to price changes as the demand for cheese? After all, pric (i) Elastic demand (ii) Inelastic demand increase in the quantity of cheese demanded, But only a small increa The more responsive quantity demanded is to changes in price, the less the change in coffee machines. It should be obvious that a $2 price reduction is a la equilibrium price and the greater the change in equilibrium quantity resulting from any product and an insignificant price cut for a high price product. In Tab Page 79 h the supply curve. Both parts of the figure are drawn to the same scale. They 4.1 Price Elasticity of Demand he initial equilibrium, Eo and the same shift in the supply curve, from So to S. Page 28 of 29 25 of 15577 words X [ Focus Page 14 of 14 7768 words Focus 79 Go Type here to search W 1:04 PM P 14 C Mostly cloudy A O x 10 ( ENG 10/16/2023