1. ELASTICITY
Sensitivity to Change

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

3. Other Demand Elasticities
Income
Cross
Antitrust cases

4. 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

5. Public Policy Cigarettes Energy again Price Elasticity
Income Elasticity

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

7. 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