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