Price elasticity of demand and determinants
Task: Look at the following list of products and try to place them in the correct order... most inelastic (least responsive to a price change) on top down to most elastic (most responsive to a price change)... We will discuss all of the concepts you need to be aware of and then do some practice equations and complete some notes. NOTE: I have written some theory notes with some worked examples and some practice questions for all the four types of elasticity here For my short explanation of why elasticity varies along the length of a linear demand curve, you can click this link https://docs.google.com/a/aisb.hu/file/d/0B2DnmWBd6LOCbzJzXzNSY2F2UWM/edit . Also I have posted PAJ Holden's video explanation of all the elasticity topics on this page. You will be given a copy of the following handout which covers the objectives above (as well as some objectives still to come)... but if you lose it then download and print out...
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We will be using page 39-43 of the textbook to go through this plus you will be given some extra tasks to do, including this one. There will be an important summative assessment on this!
Linear demand functions, equations and graphs
Linear supply functions, equations and graphs
We will cover these objectives in class today... the first piece of HL only content for the year. You will be given some pages of notes and tasks. It's not too tricky but if you still don't get it by the end of class then I suggest you watch one or all of the video explanations above. Qd = a – bP where a = the x-intercept, i.e. where the demand curve would hit the horizontal axis (a,0) and -b = slope... negative in this case
Qs = c + dP where c = the x-intercept, i.e. where the supply curve would hit the horizontal axis (c,0) and +d = slope... positive in this case
Here is a task to get us started... Derive the demand function (in the form Qd=a-bP) from the schedule below
1.1 Competitive markets: market equilibrium; the role of the price mechanism; market efficiency10/2/2019 Market equilibrium
This is where we bring demand and supply together... X marks the spot! You will receive a packet of resources that we will use to meet the objectives above. The Science of Supply and Demand
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