{"id":193,"date":"2020-03-24T04:51:30","date_gmt":"2020-03-24T04:51:30","guid":{"rendered":"https:\/\/pressbooks.ccconline.org\/accanderssenmicro\/chapter\/reading-three-categories-of-elasticity\/"},"modified":"2023-05-22T19:20:49","modified_gmt":"2023-05-22T19:20:49","slug":"reading-three-categories-of-elasticity","status":"publish","type":"chapter","link":"https:\/\/pressbooks.ccconline.org\/accanderssenmicro\/chapter\/reading-three-categories-of-elasticity\/","title":{"raw":"Reading: Three Categories of Elasticity","rendered":"Reading: Three Categories of Elasticity"},"content":{"raw":"<a href=\"https:\/\/s3-us-west-2.amazonaws.com\/courses-images-archive-read-only\/wp-content\/uploads\/sites\/1511\/2016\/06\/29205756\/3848828176_2f2e0f56c2_b.jpg\" rel=\"attachment wp-att-6626\"><img class=\"aligncenter wp-image-6626\" src=\"https:\/\/s3-us-west-2.amazonaws.com\/courses-images\/wp-content\/uploads\/sites\/343\/2016\/07\/20210009\/3848828176_2f2e0f56c2_b-1024x777.jpg\" alt=\"Photo of three meerkats at a zoo.\" width=\"575\" height=\"436\"><\/a>\n\n<span class=\"annotator-hl\">It\u2019s helpful to divide elasticities&nbsp;i<\/span>nto three categories: elastic, inelastic, and unitary. <span class=\"annotator-hl\">An <\/span><strong><span class=\"annotator-hl\">elastic demand<\/span><\/strong> or <strong>elastic supply<\/strong> is one in which the elasticity is greater than 1, indicating a high responsiveness to changes in price. Elasticities that are less than 1 indicate low responsiveness to price changes and correspond to<strong> inelastic demand<\/strong> or <strong>inelastic supply<\/strong>. <strong>Unitary elasticities<\/strong> indicate proportional responsiveness of either demand or supply.<span class=\"annotator-hl\"> In other words, the change in demand or supply is equal to the change in price<\/span>, and the elasticities equal 1. These ranges are summarized in Table 1, below.\n<table id=\"Table_05_01\" summary=\"If percentage change in quantity is greater than percentage change in price then percentage change in quantity divided by percentage change in price is greater than 1, and it is called \u201cElastic.\u201d If percentage change in quantity is equal to percentage change in price then percentage change in quantity divided by percentage change in price is equal to 1, and it is called \u201cUnitary.\u201d If percentage change in quantity is less than percentage change in price then percentage change in quantity divided by percentage change in price is less than 1, and it is called \u201cInelastic.\u201d\"><thead><tr><th colspan=\"3\">Table 1.Three Categories&nbsp;of Elasticity: Elastic, Inelastic, and Unitary<\/th>\n<\/tr><\/thead><tbody><tr><th>If . . .<\/th>\n<th>Then . . .<\/th>\n<th>And It\u2019s Called . . .<\/th>\n<\/tr><tr><td>% change in quantity &gt; %&nbsp;change in price<\/td>\n<td>% change in quantity %&nbsp;change in price &gt; 1<\/td>\n<td>Elastic<\/td>\n<\/tr><tr><td>% change in quantity = %&nbsp;change in price<\/td>\n<td>% change in quantity %&nbsp;change in price = 1<\/td>\n<td>Unitary<\/td>\n<\/tr><tr><td>% change in quantity &lt; %&nbsp;change in price<\/td>\n<td>% change in quantity %&nbsp;change in price &lt; 1<\/td>\n<td>Inelastic<\/td>\n<\/tr><\/tbody><\/table>\n&nbsp;","rendered":"<p><a href=\"https:\/\/s3-us-west-2.amazonaws.com\/courses-images-archive-read-only\/wp-content\/uploads\/sites\/1511\/2016\/06\/29205756\/3848828176_2f2e0f56c2_b.jpg\" rel=\"attachment wp-att-6626\"><img loading=\"lazy\" decoding=\"async\" class=\"aligncenter wp-image-6626\" src=\"https:\/\/s3-us-west-2.amazonaws.com\/courses-images\/wp-content\/uploads\/sites\/343\/2016\/07\/20210009\/3848828176_2f2e0f56c2_b-1024x777.jpg\" alt=\"Photo of three meerkats at a zoo.\" width=\"575\" height=\"436\" \/><\/a><\/p>\n<p><span class=\"annotator-hl\">It\u2019s helpful to divide elasticities&nbsp;i<\/span>nto three categories: elastic, inelastic, and unitary. <span class=\"annotator-hl\">An <\/span><strong><span class=\"annotator-hl\">elastic demand<\/span><\/strong> or <strong>elastic supply<\/strong> is one in which the elasticity is greater than 1, indicating a high responsiveness to changes in price. Elasticities that are less than 1 indicate low responsiveness to price changes and correspond to<strong> inelastic demand<\/strong> or <strong>inelastic supply<\/strong>. <strong>Unitary elasticities<\/strong> indicate proportional responsiveness of either demand or supply.<span class=\"annotator-hl\"> In other words, the change in demand or supply is equal to the change in price<\/span>, and the elasticities equal 1. These ranges are summarized in Table 1, below.<\/p>\n<table id=\"Table_05_01\" summary=\"If percentage change in quantity is greater than percentage change in price then percentage change in quantity divided by percentage change in price is greater than 1, and it is called \u201cElastic.\u201d If percentage change in quantity is equal to percentage change in price then percentage change in quantity divided by percentage change in price is equal to 1, and it is called \u201cUnitary.\u201d If percentage change in quantity is less than percentage change in price then percentage change in quantity divided by percentage change in price is less than 1, and it is called \u201cInelastic.\u201d\">\n<thead>\n<tr>\n<th colspan=\"3\">Table 1.Three Categories&nbsp;of Elasticity: Elastic, Inelastic, and Unitary<\/th>\n<\/tr>\n<\/thead>\n<tbody>\n<tr>\n<th>If . . .<\/th>\n<th>Then . . .<\/th>\n<th>And It\u2019s Called . . .<\/th>\n<\/tr>\n<tr>\n<td>% change in quantity &gt; %&nbsp;change in price<\/td>\n<td>% change in quantity %&nbsp;change in price &gt; 1<\/td>\n<td>Elastic<\/td>\n<\/tr>\n<tr>\n<td>% change in quantity = %&nbsp;change in price<\/td>\n<td>% change in quantity %&nbsp;change in price = 1<\/td>\n<td>Unitary<\/td>\n<\/tr>\n<tr>\n<td>% change in quantity &lt; %&nbsp;change in price<\/td>\n<td>% change in quantity %&nbsp;change in price &lt; 1<\/td>\n<td>Inelastic<\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n<p>&nbsp;<\/p>\n","protected":false},"author":32,"menu_order":9,"template":"","meta":{"pb_show_title":"on","pb_short_title":"","pb_subtitle":"","pb_authors":[],"pb_section_license":""},"chapter-type":[],"contributor":[],"license":[],"class_list":["post-193","chapter","type-chapter","status-publish","hentry"],"part":176,"_links":{"self":[{"href":"https:\/\/pressbooks.ccconline.org\/accanderssenmicro\/wp-json\/pressbooks\/v2\/chapters\/193","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/pressbooks.ccconline.org\/accanderssenmicro\/wp-json\/pressbooks\/v2\/chapters"}],"about":[{"href":"https:\/\/pressbooks.ccconline.org\/accanderssenmicro\/wp-json\/wp\/v2\/types\/chapter"}],"author":[{"embeddable":true,"href":"https:\/\/pressbooks.ccconline.org\/accanderssenmicro\/wp-json\/wp\/v2\/users\/32"}],"version-history":[{"count":1,"href":"https:\/\/pressbooks.ccconline.org\/accanderssenmicro\/wp-json\/pressbooks\/v2\/chapters\/193\/revisions"}],"predecessor-version":[{"id":194,"href":"https:\/\/pressbooks.ccconline.org\/accanderssenmicro\/wp-json\/pressbooks\/v2\/chapters\/193\/revisions\/194"}],"part":[{"href":"https:\/\/pressbooks.ccconline.org\/accanderssenmicro\/wp-json\/pressbooks\/v2\/parts\/176"}],"metadata":[{"href":"https:\/\/pressbooks.ccconline.org\/accanderssenmicro\/wp-json\/pressbooks\/v2\/chapters\/193\/metadata\/"}],"wp:attachment":[{"href":"https:\/\/pressbooks.ccconline.org\/accanderssenmicro\/wp-json\/wp\/v2\/media?parent=193"}],"wp:term":[{"taxonomy":"chapter-type","embeddable":true,"href":"https:\/\/pressbooks.ccconline.org\/accanderssenmicro\/wp-json\/pressbooks\/v2\/chapter-type?post=193"},{"taxonomy":"contributor","embeddable":true,"href":"https:\/\/pressbooks.ccconline.org\/accanderssenmicro\/wp-json\/wp\/v2\/contributor?post=193"},{"taxonomy":"license","embeddable":true,"href":"https:\/\/pressbooks.ccconline.org\/accanderssenmicro\/wp-json\/wp\/v2\/license?post=193"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}