**constant unitary elasticity** when a given percentage change in price leads to an equal percentage change in quantity demanded or supplied

**cross-price elasticity of demand** the percentage change in the quantity of good A that is demanded as a result of a percentage change in the quantity of good B demanded

**elastic demand** when the elasticity of demand is greater than 1, indicating a high responsiveness of quantity demanded to changes in price

**elasticity** the responsiveness of one variable to changes in another variable

**elasticity of savings** the percentage change in the quantity of savings divided by the percentage change in interest rates

**elastic supply** when the elasticity of supply is greater than 1, indicating a high responsiveness of quantity supplied to changes in price

**growth rate **percentage change: the change in quantity divided by the quantity

**income elasticity of demand **the percentage change in quantity demanded divided by the percentage change in income

**inelastic demand **when the elasticity of demand is smaller than 1, indicating a low responsiveness of quantity demanded price changes

**inelastic supply **when the elasticity of supply is smaller than 1, indicating a low responsiveness of quantity supplied to price changes

**inferior good **a good for which the quantity demanded falls as income rises, and the quantity demanded rises as income falls; income elasticity of demand for an inferior good is negative

**infinite elasticity** the extremely elastic situation of demand or supply in which the quantity changes by an infinite amount in response to any change in price; *also called “perfect elasticity”*

**normal good **a good for which the quantity demanded rises as income rises, and the quantity demanded falls as income falls; income elasticity of demand for a normal good is positive

**price elasticity **the relationship between the percent change in price resulting in a corresponding percentage change in the quantity demanded or supplied

**price elasticity of demand** percentage change in the quantity of a good or service *demanded* divided by the percentage change in price

**price elasticity of supply** percentage change in the quantity of a good or service *supplied* divided by the percentage change in price

**total revenue** the price of an item multiplied by the number of units sold

**unitary elasticity** when the calculated elasticity is equal to 1, indicating that a change in the price of the good or service results in a proportional change in the quantity demanded or supplied

**wage elasticity of labor supply** the percentage change in hours worked divided by the percentage change in wages

**zero elasticity** the highly inelastic case of demand or supply in which a percentage change in price, no matter how large, results in zero change in the quantity; *also called “perfect inelasticity”*