4.3+Notes+and+Questions

Economists describe the way that consumers respond to price changes as ELASTICITY OF DEMAND. It dictates how people will cut back or buy more when prices are raised or fall
==If elasticity is equal to 1 we describe demand as unitary elastic. Factors affecting elasticity are availability of substitutes, relative importance, necessities versus luxuries and change over time. A company's total revenue is defined as the amount of money the company receives by selling its goods.==

If elasticity is exactly equal to 1, we describe demand as unitary elastic.
Questions

1. When the price of something falls people buy less of it and vice versa. 2. gas can be elastic because if the price rises people might drive less. 3. It is inelastic because you need heat and will have to pay for it no matter what the price. 4. Total Revenue is price of the goods and quantity sold..