
Today's Index
Yesterday's Index 253.1
Help us compile the AmosWEB Free Lunch Index. Tell us about your last lunch.
More About the Index



Most humble month of the year?



LORENZ CURVE: In general, a diagram illustrating the degree of inequality and concentration for a group. This is accomplished by plotting the cumulative percentage of a total amount obtained by cumulative percentages of the group. A common use of the Lorenz curve is the distribution of income, in which the cumulative percentage of income is measured on the vertical axis and the cumulative percentage of the population is measured on the horizontal axis. Perfect equality is indicated by a 45degree line (that is, 10% of the population has 10% of the income, 20% of the population has 20% of the income, etc.). The actual Lorenz curve inevitably lies below the 45degree line. The extent that the Lorenz curve differs from the 45degree line indicates the extent of inequality.
Visit the GLOSS*arama




UNIT ELASTIC: An elasticity alternative in which changes in one variable (usually price) cause equal proportional changes in another variable (usually quantity). In other words, any change in price, whether big or small, triggers exactly the same percentage change in quantity. Quantity changes match price changes. This characterization of elasticity is most important for the price elasticity of demand and the price elasticity of supply. Unit elastic is one of five elasticity alternatives. The other four are perfectly elastic, perfectly inelastic, relatively elastic, and relatively inelastic. Alternative  Coefficient (E) 

Perfectly Elastic  E = ∞  Relatively Elastic  1 < E < ∞  Unit Elastic  E = 1  Relatively Inelastic  0 < E < 1  Perfectly Inelastic  E = 0  Unit elastic means that any change in price causes an equal proportion change in quantity. Quantity changes are matched by price changes. More specifically, the percentage change in quantity is equal to the percentage change in price. Unit elastic demand occurs when buyers can choose from among a modest number of substitutes in the consumption of a good. In an analogous way, unit elastic supply occurs when sellers can choose among a modest number of substitutes in the production.The chart to the right displays the five alternatives based on the coefficient of elasticity (E). In technical shorthand (which can be used by anyone with math symbols tattooed on their hands), the coefficient of elasticity (E) is given as: E = 1 This technical shorthand works for both the price elasticity of demand and the price elasticity of supply, because the negative value of the price elasticity of demand is ignored. If the negative sign is not ignored, the price elasticity of demand is given by E = 1 Two CurvesUnit Elastic Curves 

 Unit elastic demand and supply are best understood and more easily seen with pictures. The blank graph presented here is ready and willing to display a unit elastic demand curve and a unit elastic supply curve. All this is needed is click the corresponding buttons labeled [Demand] and [Supply].Notice that the unit elastic demand curve is, in fact, a curve (rather than a straight line), while the unit elastic supply curve is a straight line that originates from the origin. Both curves are configured such that a given percentage change in price is matched by an equal percentage change in quantity. The key for demand is that the slope of the curve is steep for high prices and small quantities and flat for low prices and large quantities. The key for supply is that the line goes through the origin. If the price is zero, so too is the quantity. Examples Anyone?While it would be useful to discuss a few examples of unit elastic demand and supply, such is not really possible. This is not due to any moral, religious, or philosophical objection to doing so. It is because that, unlike other elasticity alternatives, there is nothing particularly notable about goods that are unit elastic. Rather than a distinctive category, unit elastic is primarily a dividing line, a boundary, between elastic and inelastic. If the coefficient of elasticity is greater than one, then a good is elastic. If the coefficient of elasticity is less than one, then a good is inelastic. If the coefficient just happens to be exactly equal to one, then it is unit elastic. There is nothing intrinsic about a good in terms of either production or consumption that give rise to unit elastic.
Recommended Citation:UNIT ELASTIC, AmosWEB Encyclonomic WEB*pedia, http://www.AmosWEB.com, AmosWEB LLC, 20002015. [Accessed: March 30, 2015]. Check Out These Related Terms...               Or For A Little Background...            And For Further Study...        
Search Again?
Back to the WEB*pedia



State of the ECONOMY
Median weekly earnings
Fourth Quarter 2014
$796
Down slightly from the 3rd quarter 2014
More Stats


PURPLE SMARPHIN [What's This?]
Today, you are likely to spend a great deal of time strolling around a discount warehouse buying club hoping to buy either a birthday gift for your grandmother or a Tshirt commemorating yesterday. Be on the lookout for telephone calls from former employers. Your Complete Scope
This isn't me! What am I?


The wealthy industrialist, Andrew Carnegie, was once removed from a London tram because he lacked the money needed for the fare.


"The mediocre teacher tells. The good teacher explains. The superior teacher demonstrates. The great teacher inspires."  William Ward ‚ Texas Wesleyan University Administrator


IADB InterAmerican Development Bank


Tell us what you think about AmosWEB. Like what you see? Have suggestions for improvements? Let us know. Click the User Feedback link.
User Feedback

