Demand Elasticity 3 - Supply Elasticity (end Chap 6)...

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1 Microeconomics Principles February 20, 2008 Supply Elasticity (end Chap 6) Consumer Behavior (start Chap 7) Today’s Outline Refresher Supply Elasticity - Chapter 6 (115-123) Start Chapter 7 on Consumer Behavior Administrative Reminder : Homework due tonight! Exam 2 a week from today : z Wednesday February 27 th z Study Guide up on WebCT shortly Elasticity Measurements 9 Price Elasticity of Demand (E d ) z How does quantity demanded change with change in price (assume all else equal)? 9 Income Elasticity (E I) How does demand change with change in income (assume all else equal)? 9 Cross- Price Elasticity (E cross-price) How does demand for good A change with a change in the price of good B? Deja Vu Law of Supply tells us the direction that quantity supplied changes with a price change. BUT it doesn’t tell us by how much will it change! NEW: Price Elasticity of Supply Responsiveness of quantity supplied to changes in price.
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Demand Elasticity 3 - Supply Elasticity (end Chap 6)...

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