The best way to measure motivation

Classified in Economy

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 Δ Qd           Y1

   EY =  ---------  × ---------     

               Δ Y             Q1


perfectly (or infinitely) elastic:

the extremely elastic situation of demand or supply where quantity changes by an infinite amount in response to any change in price; horizontal in appearance

perfectly inelastic:

the highly inelastic case of demand in which a percentage change in price, no matter how large, results in zero change in the quantity; thus, the price elasticity of demand is zero; vertical in appearance

(relatively) elastic:

the percentage change in quantity demanded is greater than the percentage change in price; measured price elasticity of demand is greater than one (in absolute value)

(relatively) inelastic:

the percentage change in quantity demanded is less than the percentage change in price; measure price elasticity of demand is less than one (in absolute value)

unitary elastic:

when a given percent price change in price leads to an equal percentage change in quantity demanded


Total revenue: 

the price of an item multiplied by the number of units sold: 

TR = P x Qd


Cross-Price Elasticity of Demand:

                    % Δ  Qx                    percent change in price of widgets

 Exy =    -------------------

                     % Δ  Py                   ​percent change in quantity of sprockets demanded


                         Qx2  - ​Qx1            


                        (Qx2 +  Qx1) / 2                      

 Exy =      ----------------------------------  

                          Py2  - ​ Py1              


                         (Py2 +  Py1) / 2       




cross-price elasticity of demand

the percentage change in the quantity of good A that is demanded as a result of a percentage change in good B

interest elasticity of savings: 

the percentage change in the quantity of savings divided by the percentage change in interest rates

wage elasticity of labor supply: 

the percentage change in hours worked divided by the percentage change in wages

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