ECSENOMICS Chapter 4 Applications of supply and demand McGraw-Hilllrwin CopyrightC 2001 The McGraw-Hill Companies, Inc. All rights reserved
McGraw-Hill/Irwin Copyright © 2001 The McGraw-Hill Companies, Inc. All rights reserved. Chapter 4 Applications of Supply and Demand
ECSENOMICS Elastic Demand Shows Large S Quantity Response to Price Change T-25 Figure 4-1 200 120P2 D. B 8100 80上P D 60 40 Q 0 04080120160200240280320360 Quantity McGraw-Hilllrwin CopyrightC 2001 The McGraw-Hill Companies, Inc. All rights reserved
McGraw-Hill/Irwin Copyright © 2001 The McGraw-Hill Companies, Inc. All rights reserved. T-25 Figure 4-1 Elastic Demand Shows LargeQuantity Response to Price Change
ECSENOMICS Price Elasticity of Demand Falls into Three Categories T26 Fi iguI (a) Elastic Demand (b) Unit-Elastic Demand ()Inelastic Demand 1.000 1.00 A 50 0.50 D Quantity(millions) Quantity(millions) Quantity (millions) McGraw-Hilllrwin CopyrightC 2001 The McGraw-Hill Companies, Inc. All rights reserved
McGraw-Hill/Irwin Copyright © 2001 The McGraw-Hill Companies, Inc. All rights reserved. Price Elasticity of Demand Falls into Three Categories T-26 Figure 4-2
ECSENOMICS Perfectly Elastic and Inelastic demands T27 Figure 4-3 200 D Perfectl inelastic 150 demand 100D Perfectly elastic demand 0 100 300 Quantity McGraw-Hilllrwin CopyrightC 2001 The McGraw-Hill Companies, Inc. All rights reserved
McGraw-Hill/Irwin Copyright © 2001 The McGraw-Hill Companies, Inc. All rights reserved. Perfectly Elastic and Inelastic Demands T-27 Figure 4-3
ECSENOMICS Slope and Elasticity Are Not the Same Thing T28 Figure 4-4 Elasticity of Straight Line En>I ED <I R 2 McGraw-Hilllrwin CopyrightC 2001 The McGraw-Hill Companies, Inc. All rights reserved
McGraw-Hill/Irwin Copyright © 2001 The McGraw-Hill Companies, Inc. All rights reserved. Slope and Elasticity Are Not the Same Thing T-28 Figure 4-4