How Supply Demand Affects Prices What does it

How Supply & Demand Affects Prices

What does it mean to be elastic?

Elastic When the demand for a good changes in response to change in price. Example $599. 00 July 2007 $399. 00 September 2007 $$$ Price $249. 99 2010 Demand

Inelastic With a partner try and come up with a definition for inelastic. Remember that we are referring to demand. Try and finish the sentence for inelastic. Elastic When the demand for a good changes in response to change in price. $2. 50 2007 Inelastic When the demand for a good … does not change (or changes very little) in response to change in price. $3. 50 2010

With a partner decide if each example is elastic or inelastic. #1 #3 #2 #4

Elastic or Inelastic With a partner, come up with other examples of projects that are elastic or inelastic.

Normal vs. Inferior Goods

Normal Goods If your income increased what’s the first thing you would you with buy? Finish this sentence a partner: I would buy a…. .

Normal Goods $249. 99 This is the projected price for the next 3 years. You really want this phone, but you don’t have the money. It’s Christmas time and everyone just received $300 from family. What are you going to buy? Demand for the phone increases, but the cost stays the same.

What Does Inferior Mean?

Inferior Goods Vs. Vs. What is an inferior good?

Normal & Inferior Goods Turn to your shoulder buddy and make a list of normal vs. inferior examples. Normal Inferior Goods

Substitute or Complementary Goods

ould w tem se? i h c Whi purcha ? you Why Substitution Good $2. 49 $4. 99 If the cost of butter increases, the demand for margarine increases. $3. 75 $1. 25 If the cost of coffee increases, the demand for tea increases.

Complementary Good It’s July 4 th and is having a sale on hot dog buns. What are you going to buy to go with the hot dog buns? Summer 2010, there was a massive recall on peanut butter. People stopped buying peanut butter. What other complementary good would people have stopped buying?

Association Game