Wednesday, January 31, 2018

Unit 1: Basic Economic Concepts - Price Elasticity of Demand

January 26, 2018
Price of Elasticity of Demand

  • Purpose: Tells how buyers will cut back on increase their demand for a good when the price rises or falls.
  • 3 Types of Price Elasticity of Demand: 
    • Elastic Demand: When demand will change given a small change in price.
      • "Wants"
      • Example: Coca - Cola, steak, furcoat
      • Many substitutes
      • E > 1
    • Inelastic Demand: A product is said to be inelastic if the demand for it will not change regardless of price.
      • "Your needs"
      • Example: gas, milk, Insulin, water
      • Few substitutes
      • E < 1
    • Unitary Demand:
      • Perfect Society 
      • E = 1

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1 comment:

  1. UnknownFebruary 6, 2018 at 4:27 PM

    Good job with the use of visual aides to help elaborate on these notes. All points were clear and exact.

    ReplyDelete

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