Principles of Microeconomics / Unit 4 MIC 0305 short lesson, about 20 seconds
Elastic, Inelastic and Unitary
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The idea
Demand is elastic when quantity changes by a larger percentage than price, inelastic when by a smaller one, and unit elastic when the two percentages match.
In practice
Restaurant meals tend to be elastic; electricity tends to be inelastic.
Where people slip
Inelastic does not mean unresponsive. Quantity still falls when price rises, only by less than the price rose.
Your place on the trail
Every lesson rests on earlier ones and opens later ones. Tap any to jump.
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