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Reading Selections:
On The Internet: Alternatives and Supplements
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This group of readings explores economic terms and concepts that follow directly from supply and demand curves and that are important building blocks for other groups of readings. It begins with the concept of elasticity, which measures how people respond to changes. An elasticity computation can be used whenever a measurable change in something causes a measurable change in behavior. We meet the most commonly used elasticity measures: price elasticities of supply and demand, income elasticity, and cross-price elasticity. We then see how value can be represented on a demand-curve graph and meet the very important concept of marginal, examining how marginal, total, and average revenue are related. Finally we learn that elasticity and marginal revenue are related by means of a simple equation.
After you complete this unit, you should be able to:
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