Elasticity

1. Unit elasticity

1.1. |PED|=1

2. |PED|<1

3. Sensitive to change in price

4. Factors

4.1. Necessity

4.1.1. Food

4.1.2. Water

4.2. Avalibility of substitutes

4.2.1. Hot cheetos and takis

4.3. Short Run

4.3.1. A few months

4.4. Defention of market

4.5. Proportion of budget

4.5.1. Big ticket items

4.5.1.1. Rent

4.5.1.2. New car

4.5.2. Small portion of the budget

4.5.2.1. Shampoo and Conditioner

4.5.2.2. Tooth paste

4.6. Long Run

4.6.1. Over a year

5. Formulas

5.1. Price Elasticity of Demand

5.1.1. %▲Qd / %▲P

5.2. Price Elasticity of Supply

5.2.1. %▲Qs / %▲P

5.3. Cross-Price Elasticity of Demand

5.3.1. %▲Qa/ %▲Pb

5.4. Income Elasticity of Demand

5.4.1. %▲Qp / %▲I

6. Perfectly elastic demand

7. Inelasticity

7.1. Insensitve to change in price

7.2. Water

7.3. Perfect inelastic demand

7.4. Perfect Inelastic supply

7.5. Electricity

7.6. |PED|>1

8. Normal goods

8.1. Gas for your car

9. Inferior goods

9.1. Ramen Noddles

10. Substitutes

10.1. Apples and Oranges

10.2. Coffee and tea

11. Complements

11.1. Hot dogs and buns

11.2. Chips and dip

12. Luxury goods

12.1. Designer clothes

12.2. Sports cars

13. Perfect elastic supply