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. 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. # 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. # Hot dogs made
Elasticity of Supply &Demand
Sellers / Buyers are VERY responsive to
price ($) changes
Elastic Demand Elastic Supply

5. # Hot dogs made
Elasticity
People do not need it to SURVIVE.

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. # Hot dogs made
Elasticity of Supply &Demand
Sellers / Buyers are NOT as responsive to
price ($) changes
Inelastic Demand Inelastic Supply
Inelastic

8. # Hot dogs made
Elasticity
People often need it to SURVIVE.Inelastic

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?