ELASTICITY Sensitivity to Change. Price Elasticity of Demand Sensitivity to changes in price Elastic Inelastic Elasticity & Revenue Use to determine your.

Slides:

Advertisements

Similar presentations

Chapter 6: Elasticity.

Advertisements

Determinants of Elasticity

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

A B 1.Calculate the arc own price elasticity of demand between the points A and B? 2.Is the elasticity different if your go from B to A? 3.Elastic, inelastic,

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

Ch. 4: Elasticity. Define, calculate, and explain the factors that influence the price elasticity of demand the cross elasticity of demand the income.

Elasticity Overview Macroeconomics of Agriculture AGEC 430 Spring 2010.

You design websites for local businesses

Elasticities. Objectives Students will be able to Calculate the elasticity of demand. Calculate the value at which total revenue is maximized. Determine.

1 Elasticity and its Application Chapter 5 2 Price Elasticity Sensitivity of quantity demanded (or supplied) to a change in price.

1 Elasticity and its Application Chapter 5 2 Price Elasticity Sensitivity of quantity demanded (or supplied) to a change in price.

Elasticity and its Application. Concept of Elasticity Elasticity is used to describe the behavior of buyers and sellers in the market Elasticity is a.

Chapter 5: Demand and Supply Elasticity. Elasticity of Demand  Also called Price Elasticity of Demand  Measures consumer responsiveness to change in.

In this chapter, look for the answers to these questions:

04 Elasticity Copyright © 2012 by The McGraw-Hill Companies, Inc. All rights reserved. McGraw-Hill/Irwin.

Lecture 7 Elasticities Elasticities are measures of responsiveness Elasticities are measures of responsiveness –The response of one variable to changes.

Section 14.3 Further Business Application: Elasticity of Demand.

ECO 1 ELASTICITY: THE RESPONSIVESS OF DEMAND AND SUPPLY Erkmen Giray ASLIM (erkmengirayaslim.com)erkmengirayaslim.com 09/11/2015.

Demand and Elasticity Modules What’s behind the Demand Curve? Substitution effect – As price decreases, consumers are more likely to use the good.

Elasticity of Supply and Demand. Elasticity and Inelasticity  Price elasticity of demand is the response of quantity demanded to a change in price (elasticity.

Lecture 2 Elasticity Costs Perfect Competition. Elasticity Elasticity is a measure of how responsive the quantity demanded is to changes in environmental.

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.

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

Unit 8.2 Price elasticity of Demand. Elastic and Inelastic Demand Elastic demand means that demand changes by a greater percentage than the change in.

Quiz III Consumer and Producer Surplus. 1. Determine the consumer surplus at the equilibrium price shown below

Economics 100 Lecture 8’ Elasticity II Elasticity  Elastic and inelastic demand  Elasticity, revenue, and expenditure  Other elasticities of demand.

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

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

Other Elasticities Lesson Cross-Price Elasticity of Demand The Demand for a good is often affected by the demand for other products, such as substitutes.

Chapter 5 Price: The Role of Supply and Demand © 2001 South-Western College Publishing.

Topic 3 Elasticity Topic 3 Elasticity. Elasticity a Fancy Term  Elasticity is a fancy term for a simple concept  Whenever you see the word elasticity,

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.

Chapter Four: Elasticity. The Price Elasticity of Demand.

Interpreting Price Elasticity of Demand Unit 3.47.

Demand And Supply test This test consists of 10 questions designed to test your understanding of demand and supply theory The links provide you with a.

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

CHAPTER 5 Elasticity l.

Memorise these 12 goods or services Press space bar to begin.

Elasticities of Demand and Supply CHAPTER 5 C H A P T E R C H E C K L I S T When you have completed your study of this chapter, you will be able to 1.

04 Elasticity Copyright © 2012 by The McGraw-Hill Companies, Inc. All rights reserved. McGraw-Hill/Irwin.

ELASTICITY Chapter 2 A couple of 'cheat sheet' slides. In other words, a little summary. Hope this helps! Good luck!

CHAPTER 20 ELASTICITY.

1994 Microeconomics Question 3.

Principles of Microeconomics Shomu Banerjee

Test Yourself Calculate the arc own price elasticity of demand between the points A and B? Is the elasticity different if your go from B to A? Elastic,

UNIT VI – Fundamentals of Economics

15 Market Demand.

Cross Elasticity and Income Elasticity

Elasticity of Demand – 4.3.

Increase in total revenue Decrease in total revenue

Ch. 4: Elasticity. Define, calculate, and explain the factors that influence the price elasticity of demand the cross elasticity of demand the income.

4 Elasticity McGraw-Hill/Irwin

© EMC Publishing, LLC.

ELASTICITY Sensitivity to Change.

Demand Elasticity: Chapter 4 Section 3.

Chapter 4: Applications Using Demand and Supply

Determinants of Demand

Elasticity and Its Applications

Lesson 10: Elasticity of Demand

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

Chapter 6: Elasticity.

Chapter Fifteen Market Demand.

Elasticity of Demand – 4.3.

The Elasticity of Demand (Own-Price)

Chapter Fifteen Market Demand.

04 Elasticity Copyright © 2012 by The McGraw-Hill Companies, Inc. All rights reserved. McGraw-Hill/Irwin.

EXHIBIT 1 The Impact of a Decrease in Price on Total Revenue

Presentation transcript:

ELASTICITY Sensitivity to Change

Price Elasticity of Demand Sensitivity to changes in price Elastic Inelastic Elasticity & Revenue Use to determine your price – Computer ink Seminar charges

Other Demand Elasticities Income Cross –Antitrust cases

Total revenue and Elasticity If demand is elastic, and increase in price will lead to a decrease in total revenue. If demand is inelastic – just the opposite. The mineral spring Question

Public Policy Cigarettes Energy again Price Elasticity Income Elasticity

Price Elasticity of Supply The price of inputs –What does it mean to say that the price elasticity of supply is unit elastic?

Why should you care? Avoid mistakes – a higher price is no guarantee of higher revenue Interpreting data scanners Solve puzzles – property crime and drug use