Elasticity

Elasticity explained. Building on the Supply and Demand model, we measure how sensitive buyers and sellers are to price changes. Using the midpoint formula, we see that the same linear demand curve can be inelastic at one end and elastic at the other, with everyday examples like gas versus restaurant meals. At equilibrium we compare slopes to see which side is more responsive, then shift the curves to watch Consumer and Producer Surplus change differently depending on relative elasticities. Plus the theoretical extremes of perfectly elastic and perfectly inelastic curves. #SupplyAndDemand #Elasticity #Economics #Microeconomics