ECN211 L4 Demand (continued)_BB

ECN211 L4 Demand (continued)_BB - ECN 211 Macroeconomic...

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1 ECN 211 Macroeconomic Principles L4: Demand (continued)
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Types of demand curves: _________ demand: Quantity demanded is ____________ to changes in own price ___________ demand curves. __________ demand: Quantity demanded is ____________ to changes in own price _________ demand curves. 2
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3 Measuring “responses to changes in price” (Own) Price Elasticity of Demand (PED) Measures how responsive ________ ______is to changes in ________ Formula: Due to law of demand own price elasticity is _______________
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4 Example If price increases by 10% and quantity demanded falls by 30% then price elasticity is:
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5 Example Q) If the PED is -2.5 then to obtain an increase in quantity demanded of 50% price must? A) _________________
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6 Example Then a price increases of $1 causes quantity demanded to fall by 0.5 units? 0.5 p ε= -
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7 Arch Elasticity.
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8 Example When the price increased from $5 to $10, Quantity demanded fell from 20 units to 5 units.
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Elastic demand curve. Price
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This note was uploaded on 03/16/2009 for the course ECN 211 taught by Professor Kingston during the Spring '08 term at ASU.

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ECN211 L4 Demand (continued)_BB - ECN 211 Macroeconomic...

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