Notation: Δ means change; Q is quantity; P is price; subscripts distinguish cases. Use the stated period and units, retain useful working precision, and interpret the sign and size of the result. A formula calculation is evidence for an explanation, not a judgement by itself.
Use the formula that matches the variables in the question. Keep units and periods consistent; interpret the result in its context. Δ means change. These are core revision formulas; chapter explanations give the assumptions.
| Formula | Meaning and checks | Read more |
|---|---|---|
| Percentage change (new − original) / original × 100 | Percent; distinguish a percentage change from a percentage-point difference. Check: Use the original value as the denominator. A fall is negative; do not confuse a rate change with a percentage-point change. | p. 31 |
| PED % change in Qd / % change in own price | No unit; normally negative. Use absolute size for elastic or inelastic. Check: Qd means quantity demanded. A PED of −0.4 means a 1% price rise is associated with about a 0.4% quantity fall locally, other things equal. | p. 31 |
| YED % change in Qd / % change in income | No unit; positive = normal, negative = inferior. Check: Income refers to the income of the relevant consumers. A positive value below 1 indicates a normal income-inelastic good. | p. 31 |
| XED % change in Qd of A / % change in price of B | No unit; positive = substitutes, negative = complements. Check: The numerator concerns good A and the denominator good B. Reversing them changes the elasticity being calculated. | p. 31 |
| PES % change in Qs / % change in price | No unit; above 1 = elastic, below 1 = inelastic. Check: Qs means quantity supplied. PES = 0 means no quantity response; compare curves using consistent scales and a relevant point. | p. 46 |
| Total revenue P × Q | Money for the stated period; use price and quantity from the same case. Check: P is price per unit and Q is quantity sold. Revenue is not profit: costs have not been deducted. | p. 36 |
| Triangle surplus ½ × base × height | Money; valid for straight boundaries. Recalculate the entire area after a shift. Check: Base is quantity and height is price per unit. For curved boundaries, the whole area is not generally a simple triangle. | p. 58 |
| Tax revenue or subsidy cost amount per unit × post-policy quantity | Money; use units actually traded after the policy. Check: Use the wedge between buyer and producer prices. Tax revenue is not the same as deadweight loss or the fall in consumer surplus. | p. 80 |