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BUILDING CYCLE: The recurring periods of first active and then stagnant home sales and housing construction. A complete cycle usually lasts from 15 to 20 years. The source of these ups and downs rests with the competitive nature of the home construction business, the length of time it takes to build a house and, perhaps most importantly, the length of time before a house depreciates.
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                           POINT ELASTICITY: The relative responsiveness of a change in one variable (call it B) to an infinitesimally small change in another variable (call it A). The notion of point elasticity typically comes into play when discussing the elasticity at a specific point on a curve. Point elasticity can be calculated in a number of different ways. Sophisticated economists, using sophisticated mathematical techniques (better known as calculus) calculate point elasticity by using derivatives. Derivatives are calculus talk for infinitesimally small changes. The formula for calculating point elasticity using calculus is given as:The symbol that looks like a backward six (∂) is the mathematical notation for a derivative, or infinitesimally small change. The first term on the right-hand side of this formula is the percentage change in variable B and the second term is the percentage change in variable A.Unsophisticated folks can also calculate point elasticity without the use of sophisticated calculus. This is done with the midpoint elasticity formula, presented here: midpoint
elasticity | = | (B2 - B1)
(B2 + B1)/2 | ÷ | (A2 - A1)
(A2 + A1)/2 |
The first term on the right-hand side of the equation is the percentage change in variable B. The second term is the percentage change in variable A. The individual items are interpreted as this: A1 is the initial value of A before any changes, A2 is the ending value after A changes, B1 is the initial value of B before any changes, and B2 is the ending value after B changes.This midpoint elasticity formula actually calculates the average or arc elasticity of the entire line segment. However, it also calculates the point elasticity for the midpoint of a line segment.
Recommended Citation:POINT ELASTICITY, AmosWEB Encyclonomic WEB*pedia, http://www.AmosWEB.com, AmosWEB LLC, 2000-2022. [Accessed: January 20, 2022].
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Today, you are likely to spend a great deal of time looking for the new strip mall out on the highway trying to buy either throw pillows for your bed or a package of blank rewritable CDs. Be on the lookout for slightly overweight pizza delivery guys.
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During the American Revolution, the price of corn rose 10,000 percent, the price of wheat 14,000 percent, the price of flour 15,000 percent, and the price of beef 33,000 percent.
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