Chapter 6: Elastic Supply Curve
Perfectly Elastic Supply Curve
A horizontal line reflecting a situation in which any price decrease drops the quantity supplied to zero; the elasticity value is infinity
Unit-Elastic Supply Curve
A percentage change in price causes an identical percentage change in quantity supplied; depicted by a supply curve that is a straight line from the origin; the elastic value equals 1.0
Perfectly Inelastic Supply Curve
A vertical line reflecting a situation in which a price change has no effect on the quantity supplied
Income Elasticity of Demand
The percentage change in demand divided by the percentage change in consumer income; the value is positive for normal goods and negative for inferior goods
Cross-Price Elasticity of Demand
The percentage of change in the demand of one good divided by the percentage of change in the price of another good
