What is the cause of elasticity


Price and Market Theory

Important instrument of economic impact analysis: Ratio of the relative (percentage) change in the dependent variable y (effect) to the relative change in the independent variable x (cause):

The coefficient of elasticity gives with the sign the Direction of action and with its absolute value the Potency at. A value of ηy, x = - 2 means e.g. For example, if x increases by 1 percent, y decreases by 2 percent. Since discrete changes (Δy and Δx) are included in this key figure definition, which is used in empirical research, it is also called Arch or stretch elasticity designated. The x and y values ​​are either
Theoretical studies usually focus on the Point elasticity