1. Supply and Demand: Elastic vs
Supply and Demand: Elastic vs. Inelastic Demand Shortage & Surplus Price Ceilings & Price Floors

2. Elasticity of Demand/Supply
Elastic – demand (or supply) that is very sensitive to a change in price.
Inelastic – demand that is not sensitive to a change in price $ $ D1 D1 Qs Qs

3. Shortage/Surplus
Shortage – at a price below equilibrium a shortage will exist
Surplus – at a price above equilibrium a surplus will exist S1 S1 $ $ D1 D1 Qs Qs

4. Shortage/Surplus
Shortage – you don’t have enough items for all the people who want them.
Demand > Supply.
Surplus – you have more items than people want.
Supply > Demand

5. Price ceilings
A maximum price, set by the government, that can be charged for a product.
Example is rent control in big cities (New York) S1 $
Price ceiling D1 Qs

6. Price Floors
A minimum price, set by the government, that can be paid for a good or service.
Example minimum wage S1
Price floor $ D1 Qs

7. Example of elasticity https://youtu.be/F99bVMDBQJQ
Here is a video for the Sonny Rolly which was introduced in It did not sell because it was priced at then reduced to It is cool, but not at that price. They produced too many creating a surplus and had to lower price and now no longer made. Also, this is elastic demand because you don't need it etc.

8. Quiz Draw an Economic Model: Change in Demand – Increase
Draw an Economic Model: Change in Demand – Decrease
Draw an Economic Model: Change in Quantity Demanded – Increase
Draw an Economic Model: Change in Quantity Demanded – Decrease