- 118 Views
- Uploaded on
- Presentation posted in: General

Elasticity

Download Policy: Content on the Website is provided to you AS IS for your information and personal use and may not be sold / licensed / shared on other websites without getting consent from its author.While downloading, if for some reason you are not able to download a presentation, the publisher may have deleted the file from their server.

- - - - - - - - - - - - - - - - - - - - - - - - - - E N D - - - - - - - - - - - - - - - - - - - - - - - - - -

Elasticity

OF

DEMAND

WHAT WILL CONSUMERS DO WHEN PRICES CHANGE???How much more will consumers buy if the price falls?How much less will consumers buy if the price rises?

ELASTIC:

Buyers are responsive to price changes

INELASTIC:

Buyers are not responsive to price changes

- Availability of substitutes
- Price relative to income
- Necessities vs. Luxuries
- Time needed to adjust to a price change

- Sugar
- New furniture
- New car
- Gasoline
- Food
- Encyclopedia

- 2% Milk
- Sailboat
- Socks
- Aspirin
- Diet Coke
- Gold Jewelry
- Insulin