LO:
a) Understanding of price, income and cross elasticities of demand
b) Use formulae to calculate price, income and cross elasticities of demand
c) Interpret numerical values of:
e) The significance of elasticities of demand to firms and government in terms of:
a) Understanding of price, income and cross elasticities of demand
b) Use formulae to calculate price, income and cross elasticities of demand
c) Interpret numerical values of:
- price elasticity of demand: unitary elastic, perfectly and relatively elastic, and perfectly and relatively inelastic
- income elasticity of demand: inferior, normal and luxury goods; relatively elastic and relatively inelastic
- cross elasticity of demand: substitutes, complementary and unrelated goods
e) The significance of elasticities of demand to firms and government in terms of:
- the imposition of indirect taxes and subsidies
- changes in real income
- changes in the prices of substitute and complementary goods