PPT-BEHIND THE DEMAND CURVE Price Elasticity of Demand

THE LAW OF DEMAND TELLS US When price increases the QUANTITY demanded decreases and when prices decrease the QUANTITY demanded increases Why does the Qd change Consider what happens when Oakland apartment rents increase. and . Interpretation. of Elasticities. Chapter 5. Discussion Topics. Own price elasticity of demand. : A unit free measure of demand response to a good’s own-price change. Cross price elasticity of demand. Elasticity Introduction. Elasticity. Price Elasticity. Elasticity. Principles. Arc elasticity. Mid-point method. Intermediate. Point elasticity. Elasticity. What we add in ECON 5340. Elasticity: Proportionate Change in Q for a Proportionate change in P. McGraw-Hill/Irwin. Copyright © 2011 by the McGraw-Hill Companies, Inc. All rights reserved.. Elasticity. Issue: How responsive is the demand for . goods and services to . changes in . prices, . ceteris paribus. The concept of price elasticity of demand is useful here..  . Elasticity measures the degree of one variable’s dependence on another variable, or the “sensitivity” of one variable to a change in another variable. .  . While calculating elasticity, changes are expressed in relative (percentage) terms. . Chapter 5. Outline. The Elasticity of Demand. Applications of Demand Elasticity. The Elasticity of Supply. Applications of Supply Elasticity. Using . Elasticities. for Quick . Predictions . Appendix . AP Microeconomics. Rixie. Unit 2, Day 1. The Law of Demand tells us that we will buy less of a product if the price increases, but how much less?. Price Elasticity of Demand . A way to measure the responsiveness or sensitivity of consumers to a price change. and Cross Elasticity. The responsiveness of one variable to changes in another. When price rises, what happens . to demand?. Demand falls. BUT!. How much does demand fall?. Elasticity – the concept. 1. Chapter 6. Elasticity. 2. Concepts in this chapter:. Price elasticity of demand. Cross price elasticity of . demand. Income elasticity of demand. Price elasticity of supply. Elasticity measures sensitivity. Edexcel Business. Theme 1:. Marketing and people. Challenge:. What is meant by the term PED?. What is the formula for . P. ED?. State 2 factors influencing PED.. If a product has a PED of -0.7 would it be a good or bad idea to lower price? Explain your answer.. In this chapter, look for the answers to these questions:. What is elasticity? What kinds of issues can elasticity help us understand?. What is the price elasticity of demand? How is it related to the demand curve? How is it related to revenue & expenditure?. Fundamentals of. Consumer Choice. Fundamentals of Consumer Choice. Factors affecting choice. :. Limited income necessitates choice.. Consumers make choices purposefully.. One good can be substituted for another.. Fundamentals of. Consumer Choice. Fundamentals of Consumer Choice. Factors affecting choice. :. Limited income necessitates choice.. Consumers make choices purposefully.. One good can be substituted for another.. Elasticity – the concept. The responsiveness of one variable to changes in another. When price rises, what happens . to demand?. Demand falls. BUT!. How much does demand fall?. Elasticity – the concept. By Catalina Reguerin. Article Recap. Pandora is introducing a $5/month music streaming service. Most music streaming alternatives currently charge $10/month. Pandora is offering a monthly streaming option at half the cost of its competitors.