Date: March 18, 2014 Topic: Elasticity of Demand Aim: How do certain factors determine elasticity of demand? Do Now: Multiple Choice Questions.

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Date: March 18, 2014 Topic: Elasticity of Demand Aim: How do certain factors determine elasticity of demand? Do Now: Multiple Choice Questions

SOME TEACHERS MIGHT FLIP OUT IF THEY SAW YOU CHEWING GUM….. SOME TEACHERS MIGHT TURN A BLIND EYE TO THE GUM CHEWING AS LONG AS IT DOESN’T DISRUPT CLASS…

Elasticity determines if a change in price will affect your demand for the product. Elastic Demand  with a small price change you will buy much less of a good. A consumer with highly elastic demand for a good is very responsive/sensitive to price changes.

Demand for a good that you will keep buying despite a price increase. Inelastic Demand  states that a change in price does not affect your demand for the product. A consumer with highly inelastic demand for a good is relatively unresponsive to price changes.

THEIR DEMAND FOR MILK IS WHAT? THEIR DEMAND FOR ICE CREAM IS WHAT?

Milk Vs Ice Cream

Few, if any substitutes. Relatively no change in quantity demanded no matter what happens to price.

Many substitutes. Quantity Demanded is very responsive to a change in price.

The demand curve for one good can be affected by a change in the demand for another good. Complements:Complements: Two goods that are bought and used together Example: Skis, Ski boots Substitutes:Substitutes: Goods used in place of one another Example: Ski to Snowboards

SUMMARY: How do certain factors determine elasticity of demand?

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