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| | Mathematically, price elasticity is as follows: | | Mathematically, price elasticity is as follows: |
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| − | :<math>Ped = \frac{% \Delta (Quantity-demanded-of-good)}{% \Delta (Price-change-in-good)}</math> | + | :<math>Ped = \frac{% \Delta (Quantity demanded of good)}{% \Delta (Price change in good)}</math> |
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| | === Cross Elasticity === | | === Cross Elasticity === |
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| | Mathematically, cross elasticity is as follows: | | Mathematically, cross elasticity is as follows: |
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| − | :<math>Xed = \frac{% \Delta (Quantity-demanded-of-good-Y)}{% \Delta (Price-change-in-good-X)}</math> | + | :<math>Xed = \frac{% \Delta (Quantity demanded of good Y)}{% \Delta (Price change in good X)}</math> |
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| | '''''Note that cross elasticity is different from price elasticity in that cross elasticity is comparing the change in demand for one good in response to the change in price of another good'''''. | | '''''Note that cross elasticity is different from price elasticity in that cross elasticity is comparing the change in demand for one good in response to the change in price of another good'''''. |
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| | Mathematically, income elasticity is as follows: | | Mathematically, income elasticity is as follows: |
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| − | :<math>Yed = \frac{% \Delta (Quantity-demanded-of-good)}{% \Delta (Change-in-income-of-buyers-of-good)}</math> | + | :<math>Yed = \frac{% \Delta (Quantity demanded of good)}{% \Delta (Change in income of buyers of good)}</math> |
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| | === Supply Elasticity === | | === Supply Elasticity === |
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| | One more and we're done. The price elasticity of '''''supply''''' is the percent change in quantity supplied divided by the percent change in price for the good. Mathematically, that is: | | One more and we're done. The price elasticity of '''''supply''''' is the percent change in quantity supplied divided by the percent change in price for the good. Mathematically, that is: |
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| − | :<math>Pes = \frac{% \Delta (Quantity-supplied-of-good)}{% \Delta (Price-change-in-good)}</math> | + | :<math>Pes = \frac{% \Delta (Quantity supplied of good)}{% \Delta (Price change in good)}</math> |
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| | If the supply elasticity (Pes) is inelastic (less than 1), then it is difficult for suppliers to react quickly to a change in price. If Pes is elastic (more than 1), then suppliers can react quickly to a change in price, as in supplying more goods when the price increases. | | If the supply elasticity (Pes) is inelastic (less than 1), then it is difficult for suppliers to react quickly to a change in price. If Pes is elastic (more than 1), then suppliers can react quickly to a change in price, as in supplying more goods when the price increases. |