#cfa #cfa-level-1 #economics #microeconomics #reading-13-demand-and-supply-analysis-introduction #study-session-4 #summary
Economists use a quantitative measure of sensitivity called elasticity. In general, elasticity is the ratio of the percentage change in the dependent variable to the percentage change in the independent variable of interest. Important specific elasticities include own-price elasticity of demand, income elasticity of demand, and cross-price elasticity of demand.
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SUMMARYtion. Brokers can add value if they reduce search costs and match buyers and sellers. In general, anything that improves information about the willingness of buyers and sellers to engage will reduce search costs and add value.
<span>Economists use a quantitative measure of sensitivity called elasticity. In general, elasticity is the ratio of the percentage change in the dependent variable to the percentage change in the independent variable of interest. Important specific elasticities include own-price elasticity of demand, income elasticity of demand, and cross-price elasticity of demand.
Based on algebraic sign and magnitude of the various elasticities, goods can be classified into groups. If own-price elasticity of demand is less than one in absolute va Summary
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