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Elasticity wed04092014

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Elasticity wed04092014

  1. 1. 70 # Hot dogs made Think about your response to price changes. 1. Do rising gas prices affect how much gas you are willing to buy, and why? 2. Name an item might would still buy if the price is too high and why? ElasticityBellringer – half sheet 04/09/14
  2. 2. 70 # Hot dogs made Elasticity of Supply &Demand • Various factors can influence the decision of buyers and sellers in response to price changes. • Elasticity tells us how much consumers / suppliers are responsive to price changes.
  3. 3. # Hot dogs made Elasticity of Supply &Demand Sellers / Buyers are VERY responsive to price ($) changes Elastic Demand • Most normal goods • Rarely purchase • Luxury items • Have many substitutes • Large budget • Is this important to you as a business?
  4. 4. # Hot dogs made Elasticity of Supply &Demand Sellers / Buyers are VERY responsive to price ($) changes Elastic Demand Elastic Supply
  5. 5. # Hot dogs made Elasticity People do not need it to SURVIVE.
  6. 6. # Hot dogs made Elasticity of Supply &Demand Sellers / Buyers are NOT as responsive to price ($) changes Inelastic Demand • Necessities (ex. Meds) • Few or no substitutes • Essential everyday goods • Small part of a budget • Prices are often controlled Inelastic
  7. 7. # Hot dogs made Elasticity of Supply &Demand Sellers / Buyers are NOT as responsive to price ($) changes Inelastic Demand Inelastic Supply Inelastic
  8. 8. # Hot dogs made Elasticity People often need it to SURVIVE.Inelastic
  9. 9. Closure questions 3. Items that have a government controlled price are considered? 4. Give an example of such an item. 5. Substitute items are considered (elastic or inelastic)? Explain why. 6. Graph and label an elastic demand curve. Provide an elastic market item. 7. Graph and label an inelastic supply curve. Provide an inelastic market item. 8. Tell me three factors of Elasticity. 9. Do suppliers / buyers need it to survive, and why? 10. What is an elastic and inelastic item you own?

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