What Is

Elasticity?
basic explanation of elasticity in economics.
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 Definition of
Elasticity
Elasticity is a measure of a variable's sensitivity to
a change in another variable. Most commonly, this
sensitivity is the change in quantity demanded
relative to changes in other factors, such as price.
In business and economics, price elasticity refers
to the degree to which individuals, consumers, or
producers change their demand or the amount
supplied in response to price or income changes.
It is predominantly used to assess the change in
consumer demand due to a change in a good or
service's price.
Demand and Supply
The theory of supply and
demand
A description of the relationships in the
market between potential buyers and sellers
of an item.
The supply and demand model is used to
determine the price and quantity sold in the
market.
This model is significant for conducting a
microeconomic analysis of the behavior and
interactions of buyers and sellers.
DEFINITION OF SUPPLY

Supply is the number of goods or services available and

can be sold by sellers at various price levels and at a
certain time.

DEFINITION OF DEMAND

Demand is the number of goods or services that

consumers are willing and able to buy at various price
levels and at a certain time.
FACTORS AFFECTING SUPPLY
1. The price of the item itself.
2. Production source prices.
3. production rate.
4. Expectations/estimates.

FACTORS AFFECTING DEMAND

1. The price of the item itself.
2. Prices of other related goods.
3. Income level.
4. Consumer tastes.
5. Expectations/estimates.
TYPES OF ELASTICITY OF DEMAND

ELASTICITY the quantity demand of good and service is based on multiple

variable such as price,income,and preference, every time
there is a change on the variable,it always changed the
quantity demand of good and service

INCOME ELASTICITY

tthe income elasticity of demand is refers to a sensitivity of

the quantity demand basen on consumer real income.

CROSS ELASTICITY

Cross Elasticity of demand is a economic consept that

measure the sensivity of a good quantity demand based on
the change of price of other goods.

PRICE ELASTICITY OF SUPPLY

price elasticity of supply is a way to measure the

responsivenes of a supply of good ,based by the change
of the good price on the market.
Factor
Affecting AVAIBILITY OF SUBSTITUTE
Demand the avaibility of subtitute will greatly affect the elasticity of
Elasticity a product,the more the subtitute the more,the
more elastic the demand will be.

NECESITY
the necesity of a product is very influental on the elasticity
of the product,more people need the product
the more inelastic the product is.

TIME
time is also very influental on elasticty of product,the more
the pople depent on it overtime the more inelastic the
product.
The Relations of Elasticity Curve

PERFECT INELASTIC CURVES

A)E=0
B)%P=0
ALL PRICES CHANGES WONT BE RESPOND

PERFECT ELASTIC CURVES

a) a horizontal curves
b) E= infinity
c) %P-----> infinity
if there is some changed in prices, the demand
supply will rapidly transform
UNITARY ELASTIC CURVES
a) E=1
b) %P=%Q
ex: 10%P=10%Q
the quantity always follows the price
transformations.

INELASTIC CURVES
A)E<1 /INELASTIC
B)%P>%Q
MEANING IF PRICES CHANGES SIGNIFICANTLY THE
QUANTITY ONLY CHANGED A BIT OR THE PRICES ALWAYS
HIGHER THAN THE QUANTITY.
EX: 10%P > 5%Q
ELASTIC CURVES
A)E>1 ELASTIC
B)%P<%Q
EX: 10%P > 20%Q
ELASTICITY CALCULATION

*Mid-point gives an average of elasticities between two points,

whereas point-slope gives the elasticity at a certain point.Since
elasticity measures responsiveness, it can also be used to measure the
own-price elasticity of supply, the cross-price elasticity of demand, and
the income elasticity of demand. These can be calculated with the
following formulas:
Elasticity
questions
and answers
Elasticity
questions
and answers
CONCLUSION:

The concepts of Elasticity is a measure of responsiveness, calculated by the

percentage change in one variable divided by the percentage change in another.
And elasticity basic formulation is:
%ΔQuantity :%ΔPrice.
Elasticity is an important economic measure, particularly for the sellers of goods
or services, because it indicates how much of a good or service buyers consume
when the price changes.
REFERENSI

https://www.investopedia.com/terms/e/elasticity.asp
https://id.wikipedia.org/wiki/Penawaran_dan_permintaan
https://www.investopedia.com/terms/e/elasticity.asp#types-of-
4.1 Calculating Elasticity – Principles of Microeconomics (bccampus.ca)