4 the concept of elasticity that is used commonly used in micro-economic theory:1. Price elasticity of demand (Ed)2. Price elasticity of supply (Ws)3. Cross elasticity (Ec)4. The income elasticity (Ey)Here's the explanation:1. Price elasticity of demand (Ed)Used to determine the magnitude of change in quantity demanded due to a change in price of the item itself.Types of Elasticity of Demand:E> 1: ElasticElastic demand occurs when a change request is greater than the price change. E> 1, meaning that the number of price changes followed by demand in larger quantities. Example: luxury goods.E <> In ElasticIn elastic demanders occurs when prices change less influence on changes in demand. E <> means that the price change is only followed by changes in the amount requested in relatively smaller amounts. Example: demand for rice.E = 1: Joint StockUnitary elastic demand occurs when demand changes comparable to price changes. E = 1, meaning that the price change was followed by a change in the number of requests the same. Example: electronic goods.E = 0: In Perfectly ElasticIn a perfectly elastic demand occurs when price changes occur no effect on the number of requests. E = 0, which means that the change is absolutely no effect on the number of requests. Example: drugs at the time of illness.E = ~: Perfectly ElasticPerfectly elastic demand occurs when demand changes have no effect at all to changes in price. The curve will be parallel to the axis Q or X. E = ~, which means that the price change is not caused by fluctuating demand. Example: herbs.Things That Affect Elasticity of Demand1. Level of ease for the goods in question was replaced by something else.2. Large proportion of income used.3. Analysis period.4. Types of goods.The formula for calculating the elasticity:Ed = ((Q2 - Q1) / Q1) / ((P2 - P1) / P1) Ed = (ΔQ / Q) / (ΔP / P)2. Price elasticity of supply (Ws)The
elasticity of supply is the rate of change of deals on goods and
services resulting from a change in the price of goods and services. To
measure the large / small rate of change is measured by numbers called
elasticity coefficients with the symbol ES (Supply Elasticity).Types of Elasticity of Supply:As in demand, elasticity of supply can be divided into five types, namely1. In Perfectly Elastic (E = 0)Deals in perfectly elastic occurs when price changes occur no effect on the number of bids.2. In Elastic (E <e = "1)"> 1)Special elastic happens if the price change is followed by a larger number of deals.3. Unitary elastic (E = 1)Quote unitary elastic happens if a price change is proportional to the change in the number of bids.4. Elastic (E> 1)Special elastic happens if the price change is followed by a larger number of deals.5. Perfectly elastic (E = ~)Quote
perfectly elastic occurs when changes in supply is not affected at all
by changes in prices, so the supply curve will be parallel to the axis Q
or X in general.The formula for calculating the elasticity:Es = ((Q2 - Q1) / ½ (Q1 + Q2)) / ((P2 - P1) / ½ (P1 + P2)) Es = (ΔQ / ½ (Q1 + Q2)) / (ΔP / ½ (P1 + P2))3. Cross elasticity (Ec)To
measure the magnitude of the sensitivity of demand for a product if the
price of other goods is changed, the price of goods that are related to
the item in the form of goods can be complementary and substitute
goods.The formula for calculating the elasticity:Ec = ((QX2 - QX1) / ½ (+ QX1 QX2)) / ((PY2 - PY1) / ½ (PY1 + PY2))Ec = (Δ QX / ½ (+ QX1 QX2)) / (Δ PY / ½ (PY1 + PY2))4. The income elasticity (Ey)To measure the quantity of goods demanded changes resulted from the change in revenue in the formula is written as follows:Ey = ((Q2 - Q1) / ½ (Q1 + Q2)) / ((I2 - I1) / ½ (I1 + I2))Ey = (Δ Q / ½ (Q1 + Q2)) / (Δ I / ½ (I1 + I2))
