Index
II. Price Elasticity of Demand 1 video
III. Interpreting Elasticity |
VI. Determinates of Demand Elasticity
VIII. Income Elasticity of Demand
1 video |
XII.
Additional Readings
XIII Ed for College Graduates
Chapter 20 Consumer Behavior Theory |
Lecture Notes
I
Introduction
Unit 1 Review Elasticity measures the effect price changes on quantities purchased III. Interpreting Elasticity of Demand
Use pdf for a Live LINKD
IV.
Graphic Interpreting
of Elasticity
B. Total Revenue derived from a Linear Demand Curve Please Share
Elasticity measures reaction to price. Elastic is flat, quantity changes more, Inelastic is steep, quantity changes less.
V. The Total Revenue Test
|
|
Elasticity of Demand and Total Revenue |
|||
Elasticity |
When Price Increases |
Total Revenue |
|
ED >1 |
Somewhat Elastic | Quantity Changing a Lot so a lot of revenue could be lost. |
Decreases |
ED = 1 |
Unitary Elasticity | Quantity/Price Changing Same % |
No Change |
ED <1 |
Somewhat Inelastic | Quantity Changed Little so a lot of revenue could be gained. |
Increased |
Unit 5 R With elastic demand p and TR move in opposite
directions, Inelastic the same direction
We need to
understand cost production to understand making a profit. |
VI. Determinates of Demand Elasticity 6 minute video | |||||||||||||||
Product Characteristics | Elastic Demand | Inelastic Demand | |||||||||||||
Number of substitutes | Many | Few or none | |||||||||||||
% of purchaser's budget | High | Low | |||||||||||||
Type of good | Luxury | Necessity, Emergency | |||||||||||||
Desire | No hurry | Required quickly | |||||||||||||
Examples | Steak, Vacations | Salt, Bread | |||||||||||||
Unit 6 Review Substitutes, price,
necessity or luxury, budgets position determine elasticity |
|