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What is the name of the formula used to accurate
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Price elasticity</a>is used by economists to understand how supply or demand changes given changes in priceto understand the workings of the real economy. For instance, some goods are very<a href="https://www.investopedia.com/terms/e/inelastic.asp" data-component="link" data-source="inlineLink" data-type="internalLink" data-ordinal="2">inelastic</a>,that is, their prices do not change very much given changes in supply or XXXXXX, for example XXXXXX XXXX XX buy XXXXXXXX XX get to work or XXXXXX XXXXXX the world, and so if XXX prices XXXX, XXXXXX will likely still XXX XXXX the same amount XX gas. On the other XXXX, certain XXXXX XXX very<a href="XXXXX://www.XXXXXXXXXXXX.XXX/terms/e/elastic.XXX" data-XXXXXXXXX="XXXX" data-source="inlineLink" data-type="internalLink" XXXX-ordinal="X">elastic</a>, their price XXXXX cause substantial XXXXXXX in XXX demand or its XXXXXX. (<a XXXX="https://www.XXXXXXXXXXXX.XXX/XXXXX/a/arc-XXXXXXXXXX.asp" XXXX-XXXXXXXXX="XXXX" data-XXXXXX="XXXXXXXXXX" data-XXXX="XXXXXXXXXXXX" data-ordinal="X">Arc XXXXXXXXXX</a>is XXXXXXXXXXXXXXX XXX variable XXXX respect to XXXXXXX between two given points.) Here, XX XXXX look XXXX at how XXX XXXXXX XXXX XX XXX equation XX XXXXXXXX by XXXXXXXXXXXX in XXXXX by considering the price elasticity of demand – XXXXX you can contrast with XXXXX XXXXXXXXXX of supply.</p> <p><XX></p> <h2><span XXXXX="XXXX-XX-XXXXX-XXXXXXXXXXXXX">XXXXX Elasticity of XXXXXX Explained</span></h2> <p>XX XXX<a href="XXXXX://www.XXXXXXXXXXXX.XXX/terms/q/quantitydemanded.asp" data-XXXXXXXXX="XXXX" XXXX-source="XXXXXXXXXX" XXXX-type="XXXXXXXXXXXX" data-ordinal="1">quantity demanded</a>of a product exhibits a XXXXX XXXXXX in response to changes in XXX XXXXX, it is termed "elastic," that is,XXXXXXXX XXXXXXXXX far XXXX XXX prior point. XX XXX quantity XXXXXXXXX has a small XXXXXX in response XX its XXXXX, it XX XXXXXX "XXXXXXXXX"; or XXXXXXXX didn't XXXXXXX XXXX XXXX its XXXXX point.</p> <p>XXX XXXX easily a shopper can substitute XXX product XXXX a XXXXXX XXXXX for XXXXXXX, the more the XXXXX will fall – be "XXXXXXX." In XXXXX words, in a XXXXX where people equally like coffeeand XXX, if XXX price XX XXXXXXXXXX XX, people will XXXX XX XXXXXXX switching to tea, XXX so XXX XXXXXX XXX coffeewill XXXX. XXXX is because XXXXXXXXX XXXXXX considered XXXX<a href="XXXXX://XXX.XXXXXXXXXXXX.com/terms/s/substitution-effect.XXX" XXXX-XXXXXXXXX="link" XXXX-source="inlineLink" XXXX-type="XXXXXXXXXXXX" data-ordinal="X">substitutes</a>to XXXX XXXXX.</p> <p>XXX XXXX<a XXXX="XXXXX://www.XXXXXXXXXXXX.XXX/terms/d/discretionary-XXXXXXX.asp" XXXX-component="link" XXXX-source="inlineLink" XXXX-XXXX="XXXXXXXXXXXX" data-ordinal="1">discretionary</a>a purchase is, XXX moreits quantity XXXX XXXX in XXXXXXXX XX XXXXX XXXXX,that is, XXX XXXXXX the XXXXXXXXXX. So, if you XXX considering XXXXXX a new washing machinebut XXX current XXX XXXXX works (it's XXXX old and outdated), andif XXX prices of new XXXXXXX XXXXXXXX goes up, you're XXXXXX XX forgo that XXXXXXXXX XXXXXXXX and XXXX XXXXXX until prices go down or until the current machine breaks XXXX.</p> <p>On the other hand, XXX XXXX discretionary a good XX, the XXXX its XXXXXXXX demandedwill XXXX. Inelastic examples include luxury items XXXXX shoppers "pay for XXX XXXXXXXXX"XX buying a XXXXX XXXX, addictive XXXXXXXX, XXX required add-XX products. Addictive XXXXXXXX XXX include XXXXXXX XXX alcohol.<a XXXX="XXXXX://www.XXXXXXXXXXXX.com/terms/s/XXXXXXX.asp" data-XXXXXXXXX="link" data-XXXXXX="XXXXXXXXXX" XXXX-XXXX="internalLink" XXXX-XXXXXXX="X">Sin XXXXX</a>XX these XXXXX XX XXXXXXXX are possible XX XXXXXXXXX XXXXXXX the lost tax XXXXXXXXXXX XXXXX units sold XX XXXXXXXX XX XXX XXXXXX taxes XX XXXXX still XXXX. Examples of add-XX XXXXXXXX are XXX-jet XXXXXXX XXXXXXXXXX or XXXXXXX textbooks. XXXXX items are XXXXXXX XXXX XXXXXXXXX (as XXXXXXX to discretionary) XXX XXXX good XXXXXXXXXXX (XXXX XX ink XXXX work in HP XXXXXXXX).</p> <p>Time XXXX matters.<a href="XXXXX://XXX.investopedia.XXX/ask/XXXXXXX/XXXXXX/what-factors-influence-XXXXXX-demand-elasticity.asp" data-component="link" data-XXXXXX="inlineLink" data-XXXX="XXXXXXXXXXXX" data-ordinal="1">XXXXXX XXXXXXXX</a>to XXXXX fluctuations XX XXXXXXXXX for a XXX-XXX sale than for a price change XXXX a season or XXXX. XXXXXXX in XXXX sensitivity is vital XX XXXXXXXXXXXXX the XXXXX elasticity of demand and XXX comparing it XXXXXX different products.</p> <h2><span XXXXX="XXXX-XX-XXXXX-heading__text">Examples XX Price Elasticity XX XXXXXX</span></h2> <p>Generally XX XXXXX XX XXXXX, XX the XXXXXXXX XX a XXXX XXXXXXXX or XXXXXXXXX XXXXXXX XXXX than the XXXXX XXXXXX, the XXXXXXX is termedelastic. (The XXXXX changes by +5%, XXX XXX XXXXXX XXXXX by -XX%). If the XXXXXX in XXXXXXXX purchasedis the same XX the price XXXXXX (say, 10%/XX% = X), XXX productis XXXX XX have XXXX (or XXXXXXX) XXXXX elasticity. Finally, if XXX XXXXXXXX purchased changes XXXX XXXX the price (say, -5% XXXXXXXX for a +10% XXXXXX in XXXXX), then the XXXXXXX is termed XXXXXXXXX.</p> <p>To XXXXXXXXX the elasticity XX XXXXXX, let's take a very simple example: XXXXXXX XXXX the price of XXXXXX falls XX X% XXXX $X.XX a bushel to $X.XX a bushel. In response, XXXXXXX XXXXXXXX increase XXXXX XXXXX purchases XX XX%. The XXXXXXXXXX XX apples would thus be: 0.XX/0.XX = 3.33 indicating XXXX apples are quite XXXXXXX in terms XX XXXXX demand.</p> <p><br></p>">
