Elasticity

CFA Level I
#1

What do you mean when we say " the demand for this product is elastic" ?

#2

when the price goes up 1%, the demad goes down more than 1%

#3

In otherwords absolute value of elasticity is more than 1

#4

Considering the price elasticity: if e >1 means that expenditure on the product and revenues move in the opposite direction If e=1 expenditure on the product and revenues are uneffected by changes in price If e<1 means that expenditure on the product and revenues move in the same direction

#5

What do you mean by expenditure here? The relationship between price elasticity and revenue can be in the exam

#6

kochunni69 Wrote: ------------------------------------------------------- > What do you mean by expenditure here? > > The relationship between price elasticity and > revenue can be in the exam expenditure=costs, costs for the production