IntroductionBy now you should be comfortable with the main concepts of supply, demand and equilibrium. In this unit we try to make our model more realistic by including the idea of elasticity. It is the word used by economists to explain 'responsiveness', best shown with a simple example. If price increased by 10% by how much would we expect quantity demanded to drop? Different goods and services will have different price elasticities of demand. Read on to discover more.
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