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Elasticity

Elasticity is a way of measuring the sensitivity of one variable to changes in another variable that influences it. Peter Smith explains how consumers and firms respond to changes in the price of and demand for goods

• This measures the sensitivity of the quantity demanded of a good to a change in its price.

• It is calculated as the percentage change in quantity demanded divided by the percentage change in price.

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Previous

When is interest usury?

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The productivity problem and the recession

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