elasticity of demand n.
Download
Skip this Video
Loading SlideShow in 5 Seconds..
Elasticity of Demand PowerPoint Presentation
Download Presentation
Elasticity of Demand

Loading in 2 Seconds...

play fullscreen
1 / 7

Elasticity of Demand - PowerPoint PPT Presentation


  • 69 Views
  • Uploaded on

Elasticity of Demand. Chapter 4 Section 3. Demand Elasticity. Demand Elasticity : the extent to which a change in P causes a change in the Q demanded 3 types 1. Elastic = small change in P causes a large change in Q demanded example = fresh fruit.

loader
I am the owner, or an agent authorized to act on behalf of the owner, of the copyrighted work described.
capcha
Download Presentation

PowerPoint Slideshow about 'Elasticity of Demand' - gefjun


An Image/Link below is provided (as is) to download presentation

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 - - - - - - - - - - - - - - - - - - - - - - - - - -
Presentation Transcript
elasticity of demand

Elasticity of Demand

Chapter 4 Section 3

demand elasticity
Demand Elasticity
  • Demand Elasticity: the extent to which a change in P causes a change in the Q demanded

3 types

  • 1. Elastic = small change in P causes a large change in Q demanded
    • example = fresh fruit
slide3
2. Inelastic = a change in P causes a smaller change or no change in Q demanded
    • Example: table salt or gasoline
  • 3. Unit = % change in P = % change in Q demanded
total expenditures test
Total Expenditures Test
  • Multiply the price by the quantity
specific vs general market
Specific vs. General Market

Examples:

  • Specific: Exxon Gas Station
    • If P increases, people would go somewhere else, therefore it is elastic (flexible)
  • General: All Gas Stations
    • If P increases, people will have to pay the increase, therefore it is inelastic (nonflexible)
determinants of demand elasticity
Determinants of Demand Elasticity
  • If 2 or more NO = usually inelastic
  • If 2 or more YES = usually elastic