Chapter Preview: In this chapter, we consider ways of quantifying some of the relationships we discussed qualitatively in Chapter 2. In a way, this entire chapter may be seen as a series of applications of concepts that you have already learned.
By the end of this chapter, you will be able to:
- Describe and apply the concept of elasticity.
- Interpret the terms “elastic,” “inelastic,” and “unit elastic” as related to price elasticity of demand.
- Use the intuitive “percentage change” formula and the midpoint formula to measure price elasticity of demand.
- Apply the total revenue test to predict the effect on total revenue of a price change, given different price elasticity circumstances.
- List and explain the effects of the ...
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