Formulas and some definitions

There are some student's who started economics, a week before. These are formulas for 4 types of Elasticity and some definitions as well.

Price elasticity of demand: Percentage change in Quantity demand / Percentage change in Price

Income elasticigty of demand: Percentage change in Quantity demand / Percentage change in income

Cross elasticity of demand: Percentage change in Quantity demand A / Percentage change in Price B

Price elasticity of supply: Percentage change in Quantity Supply/ Percentage change in Price

Or simply:
PED = %Ch. Q D / % Ch. P

YED = %Ch. Q D / % Ch.Y

XED= %Ch. Q DA/ % Ch. PriceB

PES= %Ch. Q S/ % Ch. Price


Price elasticity of demand -->>>> how demand responds to a change in price

Income elasticity of demand ----->>>> how demand responds to a change in income

Cross elasticity of demand ---->> how demand A responds to a change in price B

Price elasticity of supply ----->> how supply responds to a change in price

When PED= negative, prices go down and demand extends also Quantity is decreased

When YED = negative it's an inferior good. When YED= Positive it's a normal good

When XED = Positive it's a substitute. When it's negative it's a complement.
For example: when XED is +0.1 it's just a substitute or when it's -0.1 it's just a complement.
Also whent it's +15 it's close substitudes but if it's - 15 it's close complements.

PES: For example the price of the good increases by 10% and Quantity supplied increases by 20% then PES= 20/10 which is 2.


Also:

If Demand/supply curve is Horizontally lined it's called Perfectly elastic.

If Demand/supply curve is Vertically lined it's called Perfectly inelastic.