relative price
The ratio of the money price of one product to the money price of another
product; that is, a ratio of two absolute prices.
price elasticity of demand
A measure of the responsiveness of quantity demanded to a change in the
product’s own price.
inelastic demand
Following a given percentage change in price, there Is a smaller
percentage change in quantity demanded; elasticity is less than 1.
elastic demand
Following a given percentage change in price, there is a greater
percentage change in quantity demanded; elasticity is greater than 1.
price elasticity of supply
A measure of the responsiveness of quantity supplied to a change in the
product’s own price.
excise tax
A tax on the sale of a particular product.
tax incidence
The location of the burden of a tax—that is, the identity of the ultimate
bearer of the tax.
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