PPT-Chapter 6: Elasticity and Demand

McGrawHillIrwin Copyright 2011 by the McGrawHill 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 and its Application. Measure of the responsiveness of quantity demanded or quantity supplied to one of its determinants. What is Elasticity?. Measure of how much quantity demanded responds to a change in price. Labor Demand Elasticities.. Measurement. Determinants. Consequences of inelastic or elastic labor demand. Labor market shocks. Government policy. Unions. Cross elasticity of labor demand. Consequences of positive or negative cross elasticity of demand. 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. 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. Elasticity of Demand describes the percentage change in . quantity demanded. that follows a price . change.. Elasticity of Demand. Demand is . Elastic. Demand is . Inelastic. . Change in Price. Large Change in . 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?. 5. Consumers and Incentives. 5.1 The Buyer’s Problem. 5.2 Putting It All Together. 5.3 From the Buyer’s Problem to the . Demand . Curve . 5.4 Consumer Surplus. 5.5 Demand . Elasticities. Key . Ideas. Mr. Henry. AP Economics. Understanding Definitions:. Which stretches or changes, more – something that is elastic or inelastic?. Something that is elastic…. Law of Demand:. other things equal, consumers will buy more of a product when its price declines and less when its price increases.. AP Microeconomics. Mr. Bordelon. Which of the following best describes price elasticity of demand?. Price elasticity of demand measures the responsiveness of the change in the quantity demanded to a change in price.. Elasticity Chapter 6 THIRD EDITION ECONOMICS and MICROECONOMICS Paul Krugman | Robin Wells What is the definition of elasticity? What is the meaning and importance of: price elasticity of demand? income elasticity of demand? Price Elasticity of Demand What is it (in simple language)? It’s how much buyers will respond to a change in price. It’s the percentage change in quantity demanded ÷ the percentage change in price. V.S. . Karpe. Dept. of Economics. Sarvajanik. Arts & Commerce College, . Visarwadi. , Tal. . Navapur. , Dist. . Nandurbar. (MH). Examples. As a result of fall in the price of radio from Rs. 500 to Rs. 400, quantity demanded increases from 100 radios to 150 radios.. ECONOMICS. and. MICROECONOMICS. Paul Krugman | Robin Wells. What is the definition of . elasticity?. What is the meaning and importance of:. price elasticity of demand?. income elasticity of demand?.