Febuary 18

# Febuary 18 - Demand Elasticity Part 2 Today's Outline...

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1 Microeconomics Principles February 18, 2008 Demand Elasticity: Part 2 Today’s Outline Refresher and Check-ins: Price Elasticity of Demand Other measures of Elasticity REMINDER: Homework 3 due Wed! Price Elasticity of Demand Responsiveness of quantity demand to changes in price. Known as ‘demand elasticity’ E d So, what does this mean? What do we know about change in quantity demanded if E d = 1.6 ? Hints to help you remember. . P 0 Q LASTIC 0 P Q NELASTIC Check In The UMaine bookstore discovers that the price elasticity of demand for ‘Crew’ T-shirts is .50. This means a 20% increase in the price of t-shirts, will cause the quantity of t-shirts demanded to : A. increase by approximately 10 percent. B. decrease by approximately 25 percent. C. decrease by approximately 10 percent. D. decrease by approximately 2.5 percent.

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2 Check In The UMaine Football team wants to increase attendance at their home games (and make a little more money). They discover that by dropping the price just a little, they make a
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Febuary 18 - Demand Elasticity Part 2 Today's Outline...

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