Use Sophia to knock out your gen-ed requirements quickly and affordably. Learn more


Author: Kate Eskra
Video Transcript
Terms to Know
Cross-Price Elasticity

Change of demand (supply) that occurs due to change in price of substitutes or complements.


Measurement of change in quantity demanded (supplied) which indicates the sensitivity of one variable to characteristics of another variable or income.

Income Elasticity

An economic measure of change in relation to income and demand for normal, inferior, and luxury goods.

Inferior Goods

Goods for which demand decreases as income increases.

Luxury Goods

A good that offers better quality and features which is consumed when income rises.

Normal Goods

Goods for which demand increases as income increases.

Own-Price Elasticity

Elasticity of demand (supply) when the price of a good changes, keeping all other variables and goods separate.