#cfa #cfa-level-1 #economics #microeconomics #reading-13-demand-and-supply-analysis-introduction #study-session-4
We can expand
Equation 23 algebraically by noting that the percentage change in any variable
x is simply the change in
x (denoted “∆
x”) divided by the level of
x.
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4.1. Own-Price Elasticity of Demandns per week or liters per day, and it does not matter whether we measure price in dollars per gallon or euros per liter; 10 percent is 10 percent, and 8 percent is 8 percent. So the ratio of the first to the second is still –0.8.
<span>We can expand Equation 23 algebraically by noting that the percentage change in any variable x is simply the change in x (denoted “∆x”) divided by the level of x. So, we can rewrite Equation 23, using a couple of simple steps, as
Equation (24)
Edpx=%ΔQdx%ΔPx=ΔQdxQdxΔPxPx=(ΔQdxΔPx)(PxQdx)
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