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Economists are often interested in how changes in one variable affect other related variables. A summary quantitative measure of this relationship is provided by elasticity, which refers to the degree of responsiveness of an entity (e.g., quantity of a good demanded by consumers) to a change in specific determinants (e.g., price, income, etc.). Elasticity varies among different types of goods. Some commodities have a greater magnitude of responsiveness to changes in elasticity’s determinants than do others. For instance, a reduction in the price of alcohol may result in a minuscule increase in sales, whereas a price cut in smartphones may lead to a substantial rise in purchases.

With the increasing prevalence of market-based reforms and educational marketplaces where parents choose from among various schooling and online ...

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