Index
Elasticity - 1
Elasticity - 2
Elasticity - 3
The Total Outlays Method - 4
Total Outlays - 5
Total Outlays - 6
Total Outlays - 7
Revenue Loss - Revenue Gain - 8
Revenue Loss - Revenue Gain - 9
Inelastic Demand - 10
Inelastic Demand - 11
Elastic Demand - 12
Summary and Solutions - 13
Perfectly Elastic Demand - 14
Perfectly Inelastic Demand - 15
Arc Elasticity of Demand - 16
Calculating Elasticity of Demand - 17
Calculating Elasticity of Demand - 18
Calculating Elasticity of Demand - 19
Factors Effecting Elasticity of Demand- 20
Normal and Inferior Goods - 21
Factors Effecting Elasticity of Supply - 22
Factors Effecting Elasticity of Supply - 23
Factors Effecting Elasticity of Supply - 24
Inelastic Supply - 25
Perfectly Inelastic Supply - 26
Elastic Supply - 27
Factors Effecting Elasticity of Supply - 28
Factors Effecting Elasticity of Supply - 29
Factors Effecting Elasticity of Supply - 30
Cross Elasticity of Demand - 31
Income Elasticity of Demand - 32
Income Inelastic Goods - 33
Income Elasticity - 34

Normal and Inferior Goods - 21

All normal goods have positive elasticities of demand; the elasticity of the good is > 1. For some goods (like petrol), the price elasticity of demand will be very close to zero; but it will be greater than zero - some decrease in demand for petrol will result if price rises.

Inferior goods have negative elasticities of demand. As income rises, the quantity demanded actually falls.