Presentation is loading. Please wait.

Presentation is loading. Please wait.

Elasticity of Demand Economics.

Published byDarleen Stewart Modified over 5 years ago

Similar presentations

Presentation on theme: "Elasticity of Demand Economics."— Presentation transcript:

1 Elasticity of Demand Economics

2 What Does it Mean? Economists: How consumers respond to price changes.
In other words: Elasticity of demand is how much buyers will increase or decrease their demand for a good when the price rises or falls

3 Inelastic vs. Elastic Inelastic –
unresponsive change in demand when price changes Elastic – responsive change in demand when price changes Examples: clothing, food

4 Price Range Elasticity of demand can vary greatly at different price ranges Examples: Inelastic Magazine rises 50% : $ .20 to $ .30 Demand shouldn’t change much Elastic Magazine rise 50%: $4.00 to $6.00 Some people may refuse to pay the $2.00 increase

5 Factors Affecting Elasticity
Availability of Substitutes Few substitutes – Demand still goes up with price increases Example: Tickets to concerts, sporting events

6 Factors Relative Importance Necessities vs. luxuries
How much can you afford to spend on a product? Necessities vs. luxuries Needs vs. wants

7 Factors Change over time Can’t find substitutes in short term
In long term demand becomes elastic Examples: Gasoline, ice

Download ppt "Elasticity of Demand Economics."

Similar presentations

.  The degree to which a product’s demand and supply curve react to price determines whether the good is price elastic or price inelastic.  If the.

.  The degree to which a product’s demand and supply curve react to price determines whether the good is price elastic or price inelastic.  If the.
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.

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.
Chapter 4: Demand Section 3: Elasticity of Demand

Chapter 4: Demand Section 3: Elasticity of Demand
Demand Chapter 4 Section 3. Key Terms elasticity of demand: a measure of how consumers respond to price changes inelastic: describes demand that is not.

Demand Chapter 4 Section 3. Key Terms elasticity of demand: a measure of how consumers respond to price changes inelastic: describes demand that is not.
Chapter 4.3: Elasticity of Demand

Chapter 4.3: Elasticity of Demand
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 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 Economics. What Does it Mean? Economists: How consumers respond to price changes. Economists: How consumers respond to price changes.

Elasticity of Demand Economics. What Does it Mean? Economists: How consumers respond to price changes. Economists: How consumers respond to price changes.
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.

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

Degree to which changes in a good’s price affect the quantity demanded by consumers.
Do Now 1. Think back to your budget project. What items or services would you cut back on if the price suddenly went up by 50%? 2. How would a raise in.

Do Now 1. Think back to your budget project. What items or services would you cut back on if the price suddenly went up by 50%? 2. How would a raise in.
Elasticity of Demand- A measure of how consumers react to a change in price Inelastic- Your demand for a good that you will keep buying despite a price.

Elasticity of Demand- A measure of how consumers react to a change in price Inelastic- Your demand for a good that you will keep buying despite a price.
Elasticity of Demand The degree to which price effects demand.

Elasticity of Demand The degree to which price effects demand.
Elasticity of Demand D. E. Weir Lawrence Central High School.

Elasticity of Demand D. E. Weir Lawrence Central High School.
UNIT II Markets and Prices. Law of Demand Consumers buy more of a good when its price decreases and less when its price increases.

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.

 A measure of how much buyers and sellers respond to changes in market conditions:  Changes in : Price; Income; Price of Related Goods.
Elasticity of Demand Chapter 4 Section 3. Elasticity of Demand – dictates how drastically buyers will cut back or increase their demand of a good when.

Elasticity of Demand Chapter 4 Section 3. Elasticity of Demand – dictates how drastically buyers will cut back or increase their demand of a good when.
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?

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?
Economics Chapter 4 Demand. Section 3 Elasticity of Demand.

Economics Chapter 4 Demand. Section 3 Elasticity of Demand.
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.

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.
Elasticity of Demand. Slope of Demand Curves All demand curves do not have the same slope Slope indicates responsiveness of buyers to a change in price.

Elasticity of Demand. Slope of Demand Curves All demand curves do not have the same slope Slope indicates responsiveness of buyers to a change in price.

Similar presentations

Ads by Google