We've covered price elasticity of demand. It turns out there are a whole host of other elasticities that measure, in quantitative terms, how much quantity demanded or quantity supplied responds. To a certain change in other determinants, besides price. Could be income on the demand side. It could be technology on the supply side. All elasticities focus on this quantitative responsiveness. Let me highlight for you three other important elasticities we'll see throughout this course. First, income elasticity of demand. It measures by how much, in percentage terms, quantity demanded for a good, responds to a certain percentage change in income, I. For normal goods, for goods in which income goes up quantity demanded goes up, this ratio is greater than zero. For inferior goods, cases like public transportation, when people's income I goes up a certain percentage term, their demand for the product goes down. So the ratio is less than zero. There are arc elasticity formulas for income elasticity, and there are point income elasticity formulas, just like we saw with price elasticity of demand. And one could also calculate a point income elasticity based on the initial income quantity demanded point. Or on the final point. So, a very similar pattern to estimating that we saw in price elasticity of demand case. A second important elasticity besides the price elasticity of demand and income elasticity of demand is cross price elasticity of demand. What this measures is for a certain percentage change of ink of price of one good Y, how much does consumption of the other good X change by? So, the numerator of this cross price elasticity is the percentage change in quantity demanded of good X. Let's say the quantity demanded of BMWs when in the denominator, what we're looking at is the percent of change in price of Mercedes cars. The ratio between the percent of change in quantity demanded of one good relative to the price change of another. Will be greater than zero in the case of substitutes. It will be positive in the case of substitutes. The sign of this particular ratio is important. We don't take the absolute value like we did in price elasticity of demand. And think through the case where we're looking at a price change in Mercedes. We expect that more people will run to substitutes like BMWs when Mercedes raises its price. And that's why if, in cases like Mercedes being a substitute for BMW, will see this ratio being greater than zero. If we're looking at compliments, goods that people consume in tandem, then we'll see this ratio be less than zero. When the price of gasoline for example goes up, we expect people to buy less BMWs. Gasoline is a compliment for BMWs. Cross price elasticities get a lot of attention in anti-trust cases. Because in courts that are looking at these situations, people want to know how close, how many substitutes are available, or how much market power does an individual firm have? The larger the positive number, it means that there are a lot more substitutes people can run to when the price of a particular product has changed. If the number is closer and closer to zero, then that means that the substitutes aren't that good for the underlying product that, potentially, can exercise more pricing power. And then the last elasticity to cover with you in this session is own-priced elasticity of supply. Very similar to own-price elasticity of demand, except here we're looking at the percentage change in quantity supplied relative to the percentage change in price. There's no absolute value. You know, we expect this relationship always to be positive. Why? Because of the law of supply. Higher price will lead to greater quantity supplied. Lower price, less quantity supplied. There's a arc price elasticity of supply formula. There's a point elasticity of supply formula. The Greek symbol Epsilon is what we use to indicate Own-Price Elasticity of Supply. Where the ratio is bigger that one, where the percentage change in quantity outweighs the percentage change in price, we say it's an elastic supply case. When it's less than one. In elastic. Just like the situation when we were looking at on own-price elasticity of demand. And when it's equal to one, we say we have a case of unitary supply elasticity. So, those are three important elasticities that we'll see often, in addition to own-price elasticity of demand. But there're a whole host of others.