What is the difference in the price elasticity of demand for an individual firm in a perfectly competitive industry as compared with a monopolist. Why are the price elasticity different?© BrainMass Inc. brainmass.com March 21, 2019, 8:07 pm ad1c9bdddf
First, let me explain what price elasticity of demand (hereafter ped) is. ped measure how responsive consumers are to price changes. When ped is between 0 and -1, we call this inelastic (which means that when price goes up by 10%, the quantity decrease by less than 10%). When ped is -1, this is called unitary elastic (meaning that when prices goes up by 10%, the quantity demanded decreases by exactly 10%). Finally, ped between minus infinity to -1 is called elastic and this means ...
The difference in the price elasticity of demand for an individual firm in a perfectly competitive industry as compare to a monopolist are examined. Why price elasticity is different is determined.