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Microeconomics: Supply and Demand Unit 2 Economics Microeconomics: Supply and Demand

Essential Question: Define and illustrate the concept of elasticity.

Determinants of Demand Individual Demand Determinants of Demand (factors that cause a shift or change in Demand) Tastes and preferences Number of Buyers (Population) Income Normal Goods Inferior Goods Price of Related Goods Substitute Good Complementary Good Consumer Expectations

Introduction to Individual Demand https://www.youtube.com/watch?v=dtTzkadiyzk 4:14

Individual Demand Individual Demand P Qd $5 4 3 2 1 10 20 35 55 80 P 6 5 4 3 2 1 10 20 30 40 50 60 70 80 Quantity Demanded (bushels per week) Price (per bushel) Individual Demand P Qd $5 4 3 2 1 10 20 35 55 80 D Q

Individual Demand Demand Can Increase or Decrease Individual Demand P 6 5 4 3 2 1 Individual Demand P Qd Increase in Demand $5 4 3 2 1 10 20 35 55 80 Price (per bushel) D2 Decrease in Demand D1 D3 Q 2 4 6 8 10 12 14 16 18 Quantity Demanded (bushels per week)

Demand Curve is Called a Change in Quantity Individual Demand Demand Can Increase or Decrease An Increase in Demand Means a Movement of the Line P 6 5 4 3 2 1 Individual Demand A Movement Between Any Two Points on a Demand Curve is Called a Change in Quantity Demanded P Qd $5 4 3 2 1 10 20 35 55 80 Price (per bushel) D2 Decrease in Demand D1 D3 Q 2 4 6 8 10 12 14 16 18 Quantity Demanded (bushels per week)

Elasticity of Demand Concept measuring responsiveness to price changes Relatively Elastic (small change in Price results in a large change in Q Demanded) Relatively Inelastic (large change in Price results in a small change in Q Demanded)

Price Elasticity of Demand https://www.youtube.com/watch?v=4oj_lnj6pXA Pause and take notes as needed 9:34

Answer the EQ: (minimum 5 sentences) Define and illustrate the concept of elasticity.