Elasticity in Economics - 1497 Words
Managerial Economics & Business Strategy Chapter 3
Quantitative Demand Analysis
Michael R. Baye, Managerial Economics and Business Strategy, 6e. ©The McGraw-Hill Companies, Inc., 2008
The Elasticity Concept
• How responsive is variable “G” to a change in variable “S”
EG , S
% ΔG = % ΔS
If EG,S > 0, then S and G are directly related. If EG,S < 0, then S and G are inversely related. If EG,S = 0, then S and G are unrelated.
Michael R. Baye, Managerial Economics and Business...
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