With the essay and data response paper on Monday it might be appropriate to go through elasticity. You should know the following for PED, YED, CPED, and PES:
2. Equation for calculation
3. Values – what do they mean?
5. Usefulness to businesses
This topic comes up in a variety of guises:
– Indirect taxes and subsidies
– Market failure
– Trade – J curve
Here is a reminder of some of the main points for PED:
Also a key graph for Income Elasticity of Demand.