Price Elasticity of Supply and Demand

Slides:

Advertisements

Similar presentations

Supply and Demand II Lesson 12 – 5a & 5b.

Advertisements

Chapter 4 The Law of Demand.

3.02Interpret the theory of supply and demand. Supply vs. Demand Supply- the amount Producers are willing and able to produce and sell Supply- the amount.

Chapter 5 Some Applications of Consumer Demand, and Welfare Analysis.

AP Economics Mr. Bernstein Module 47: Interpreting Price Elasticity of Demand October 17, 2014.

Elasticity & Total Revenue Chapter 5 completion…..

Applying Demand and Supply: The Concept of ELASTICITY.

Economics: Principles and Practices

Price Elasticity of Demand Price Elasticity and Total Revenue Determinants of Price Elasticity of Demand Elasticity of Demand.

Elasticity of Demand Unit 4.3. What is Elasticity of Demand? Elasticity is a measure of the amount of change in demand due to a change in price. How responsive.

Mr. Schoonover 10/02/2009.  Elasticity of Demand – A measure of how people change their buying patterns when their income increases.

Elasticity ©1999 South-Western College Publishing.

Elasticity of Demand. What goods would you always find money to buy even if the price were to raise drastically? What goods would you cut back on, or.

Economics Vocabulary Chapter 3

Lesson Objectives: By the end of this lesson you will be able to: *Explain the law of supply. *Interpret a supply schedule and a supply graph. *Examine.

CONSUMER BEHAVIOUR Theory Determinants of demand The Demand Curve Explanations of Demand - utility - indifference curve analysis - revealed preference.

1 Essential Question: Explain why supply is considered to be “producer” controlled, describe the relationship between supply and price according to the.

Elasticity. Elasticity measures how sensitive one variable is to a change in another variable. –Measured in terms of percentage changes, elasticity tells.

Elasticity of demand is a measure of how consumers react to a change in price.  Demand for a good that consumers will continue to buy despite a price.

ELASTICITY OF DEMAND Are there some goods that you would always find money to buy, even if price increased greatly? Are there goods that you would cut.

2.02 Supply and Demand Understand Economics and Economic Systems Interpret supply and demand graphs.

1 Demand and Supply Elasticities. 2 Price Elasticity of Demand Price elasticity of demand: the percentage change in the quantity demanded that results.

Elasticity  Price elasticity  demand  supply  Cross elasticity  Income elasticity  Price elasticity  demand  supply  Cross elasticity  Income.

Copyright © 2004 South-Western 5 Elasticity and Its Application.

Supply (The Business Point of View) Another Key Economic Concept.

4.3 The Elasticity of Demand Elasticity of demand describes how people react to changes in prices.

The Law of Demand What is Demand?  Quantity demanded of a product or service is the number that would be bought by the public at a given price.

Degree to which changes in a good’s price affect the quantity demanded by consumers.

Price Elasticity. HOW MUCH MORE OR LESS? DOES IT MATTER? THE LAW OF DEMAND SAYS... Consumers will buy more when prices go down and less when prices go.

Demand Review Concepts of demand and supply are cornerstones of economics Law of demand states that prices and quantity demanded vary inversely – Other.

 If a product changes its price, we expect there will be a change in the quantity demanded  The degree of change is the elasticity of the product.

Elasticity of Demand The degree to which price effects demand.

Elasticity of Demand D. E. Weir Lawrence Central High School.

Monday, April 6 Welcome back! I hope your weekend was great! Bellringer: – What is the difference between a change in demand and a change in quantity demanded?

Elasticity and its Application How much do buyers and sellers respond to a change in price.

UNIT II Markets and Prices. Law of Demand Consumers buy more of a good when its price decreases and less when its price increases.

 A measure of how much buyers and sellers respond to changes in market conditions:  Changes in : Price; Income; Price of Related Goods.

Effect of a tax on price and quantity S + tax S O P1P1 Q1Q1 D P Q.

Chapter 4 Section 3 Elasticity of Demand. Elasticity of demand is a measure of how consumers react to a change in price. What Is Elasticity of Demand?

Elasticity of Supply Unit 5.4. Elasticity and Supply Elasticity with supply works just like elasticity with demand. Suppliers look at the amount of change.

Do Now – Write Down Your Answers Are there some products that you would continue to buy, even if the price were to skyrocket? Are there other products.

ECO Microeconomics - Dr. D. Foster

Microeconomics: Supply and Demand

Consumer Choice and Elasticity

Price Elasticity.

Price elasticity of demand

Price elasticity of demand

CHAPTER 20 ELASTICITY.

Aim: What is the law of supply and demand?

As the Price of X increases…

Price Elasticity of Demand

Ch. 5.1 fill in Notes: What is Supply?

Price Elasticity of Demand

Chapter 4 The Law of Demand.

Price Elasticity.

Theme 1: Introduction to markets and market failure

Elasticity & Price.

The Demand Curve and Elasticity

The Demand Curve and Elasticity

Elasticity of Demand Chapter 4 Section 3.

Price Effect Market Supply Price Elasticity Change in Supply

Elasticity & Total Revenue

Elasticity A measure of the responsiveness of one variable (usually quantity demanded or supplied) to a change in another variable Most commonly used elasticity:

The Elasticity of Demand (Own-Price)

Unit 2: Supply, Demand, and Consumer Choice

The Demand Curve and Elasticity

Price Elasticity of Supply and Demand

Elasticity of Demand Unit 2.

Presentation transcript:

Price Elasticity of Supply and Demand OBJECTIVE: Know the characteristics of elastic demand. Be able to graph elastic demand. Know the characteristics of elastic supply. Be able to graph elastic supply. Be able to give examples of each.

Elastic vs. Inelastic Demand SUBSTITUTE PRODUCTS. NOT IMPORTANT ON CONSUMER BUDGET. (NECESSITY) LOW CONSUMER LOYALTY. INELASTIC DEMAND LITTLE TO NO SUBSTITUTES. A NECESSITY OF LIFE. HIGH CONSUMER LOYALTY.

Inelastic Demand

Elastic Demand

Controversial Examples

Consumer Loyalty on Elastic Demand What effect does consumer loyalty have on the elasticity of demand? Examine the handout - Building Thinking Skills.

Total Revenue (TR) Formula TR = Price X Quantity If Price rises, and TR rises, it is inelastic demanded. If price falls, and TR falls, it is inelastic demand. If price rises, and TR falls, it is elastic demand. If the price falls, and the TR rises, it is elastic demand. Handout 10-2 Elasticity of Demand and Changes in Total Revenue.

Elasticity of Supply How difficult is it to make a good or service? Does the amount of money offered to the supplier alter the amount of production? What are some examples?

Jiro Dreams of Sushi Elastic or inelastic supply?

Closure Do the Elasticity of Demand Exercise.