Define all of the Key Terms .
Arc Elasticity
Complementary Good
Cross -Price Elasticity of Demand
Elasticity
Income Elasticity of Demand
Inferior Good
Luxury Good
Necessity Good
Normal Good
Point Elasticity
Price Elasticity of Demand
Price Elasticity of Supply
Substitute Good
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1. Arc Elasticity - It refers to the elasticity of demand or supply calculated over an arc or range of price and quantity instead of at a specific point.
2. Complementary Good - A complementary good is a product that is used together with another product. An increase in the price of one good leads to a decrease in the quantity demanded for both goods.
3. Cross-Price Elasticity of Demand - It is the measure of the responsiveness of the demand for one good when the price of another good changes. It can be positive or negative.
4. Elasticity - It is a measure of the responsiveness of one variable to changes in another variable.
5. Income Elasticity of Demand - It is the measure of the responsiveness of demand for a good or service to a change in income. It can be positive or negative.
6. Inferior Good - It is a good for which demand decreases when the income level of its consumers increases.
7. Luxury Good - A luxury good is a good for which demand increases more than proportionally to an increase in income.
8. Necessity Good - It is a good for which demand remains constant as income changes.
9. Normal Good - A normal good is a good for which demand increases when the income level of its consumers increases.
10. Point Elasticity - It is the measure of elasticity at a specific point on a demand or supply curve.
11. Price Elasticity of Demand - It is the measure of the responsiveness of the quantity demanded of a good or service to changes in the price of the same good or service.
12. Price Elasticity of Supply - It is the measure of how much the quantity supplied of a good or service changes in response to a change in price.
13. Substitute Good - A substitute good is a product that can be used as an alternative to another product. An increase in the price of one good increases the quantity demanded for the substitute good.