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The price elasticity of a good measures the proportionate change in demand to an inital change in price. If a good is price inelastic it suggests that an increase in price leads to a less than proportiona...

Students would be expected to focus on the exchange rate effect - this is quite a useful effect since it allows students to explore the conflicting effects on exporters and importers. It is a nice way to ...

The factors that determine the price elasticity of demand for a good are:

1. substitute goods - if a good has many substitutes, a change in its price will have a majo...

We can determine weather the burden of a tax will fall on consumers or suppliers by looking at the price elastcity of demand. Although both groups will usually share the incidence of the tax, the group wi...