A good has an elastic demand when a price change results in a large decrease in the quantity consumed. More specifically, it refers to the situation when a one percent increase in price causes a decre [..]

Spatial arbitrage refers to the tendency of traders to ship goods from one location to another whenever the price difference between the two locations is large enough to cover the cost of transportati [..]

The coefficient of variation is a measure of the variation in a variable. It is calculated as the standard deviation of the variable divided by the mean of the variable. If the coefficient of variatio [..]

The consumer price index (CPI) is a ratio of the general level of prices in a given period and the level of prices in the base period. It is usually expressed as a percentage. For example, if the base [..]

Consumer surplus is an estimate of the benefit to consumers from paying a fixed price rather than each consumer paying the maximum he or she is willing to pay. The level of consumer surplus is rarely [..]

The demand curve describes the relationship between the price of a commodity and the level of consumption (or demand) of the commodity. Typically, the demand curve is graphed with the price on the ver [..]

A good has an elastic supply when a price change results in large increase in the quantity of production. More specifically, it refers to the situation when a one percent increase in the price causes [..]

The percentage change in production in response to a 1% increase in the price. Because it takes time for producers to respond to higher prices, supply elasticities are smaller in the short term (withi [..]

The number of units of one currency needed to purchase one unit in another currency. In other words, it is the “price” of one currency expressed in terms of another currency. For example, the US dolla [..]

The export parity price is the price one could get for exporting it from a given location, given the world price and the cost of delivering it to international markets. It is calculated as the world p [..]