ROXAS, Jose Emannuel R.

BSBA BE1-2
1. The market supply is the total quantity of a good or service all producers are
willing to provide at the prevailing set of relative prices during a defined period of
time
2. Market demand is the total amount of goods and services that all consumers are
willing and able to purchase at a specific price in a marketplace.
3. Demand and supply curve:

4. Elasticity refers to the responsiveness of one economic variable, such as quantity

demanded, to a change in another variable, such as price.
5. Kinds of Elasticity
Price Elasticity of Demand: The price elasticity of demand, commonly known
as the elasticity of demand refers to the responsiveness and sensitiveness of
demand for a product to the changes in its price.
Income Elasticity of Demand: The income is the other factor that influences the
demand for a product. Hence, the degree of responsiveness of a change in
demand for a product due to the change in the income is known as income
elasticity of demand.
Cross Elasticity of Demand: The cross elasticity of demand refers to the
change in quantity demanded for one commodity as a result of the change in the
price of another commodity. This type of elasticity usually arises in the case of
the interrelated goods such as substitutes and complementary goods.
Price Elasticity of Supply: Elasticity applies not only to demand, but also to
supply. Suppliers of a good or service want to sell more of it when the price
rises. Price elasticity of supply measures how much the quantity supplied
changes in response to a change in price.
6. Formula used in computing elasticity
7. Compute for the elasticity of the following:
Qd Price Qs
25 1 3
20 2 9
15 3 15
10 4 25
5 5 30

Let the formula be: