This preview has intentionally blurred sections. Sign up to view the full version.
View Full DocumentThis preview has intentionally blurred sections. Sign up to view the full version.
View Full Document
Unformatted text preview: d ) of chocolate bars is linear. 'Demand Function' 'Inverse Demand Function' Case 1 : Suppose that price changes from $2 to $4. Case 2 : Now, suppose that price changes from $8 to $10. Slope = Econ 251 Fall 2009 Handout 5 09/08/09 4 When the demand curve is linear, it is always the case that _______________________ Below Midpoint: Above Midpoint: At Midpoint: II. Determinants of the priceelasticity of demand: 1. Other things equal: • small proportion of income (budget) ___________________________________ • large proportion of income (budget) ___________________________________ Ex: 2. • Many ______________________ for a good/service _______________________ • Few _______________________ for a good/service ______________________ Ex: 3. • More time b • Less time b Ex: Econ 251 Fall 2009 Handout 5 09/08/09 5 Two Extremes: Q...
View
Full Document
 Spring '08
 Blanchard
 Microeconomics, Price Elasticity, Supply And Demand

Click to edit the document details