byrns student guide for learning contemporary economics 269 chapter 20 5 elasticity objectives after you have read and studied this should be able to describe the concept of some specific elasticities indicate relationships between incidence various tax burdens price supply demand compute from numerical observations understand why marginal units are important decision making explain law equal advantage its relevance economic efficiency review key points 1 is a measure responsiveness amount demanded small changes defined as relative change in quantity divided by e q p d 2 problems result when calculating if initial prices quantities used bases so economists typically use midpoint negative but convenience we absolute values avoid sign 3 less than one then relatively unresponsive said inelastic greater very responsive
