Discussion WEEK 04: Elasticity

Additional insights about supply and demand

Price Elasticity of Demand

Part I

After watching the clip from

the Wire- Stringer Bell learns the basics of Macroeconomics [ from youtube: the website is

https://www.youtube.com/watch?v=COf2bQEQ7Zw ]

(note the link has mislabeled the topic as Macroeconomics, it is clearly Microeconomics!)

Answer the following:

a) what are the two goods/services Stringer Bell is comparing as far as their elasticities are concerned?

b) using the determinants of price elasticity of demand,explain why the goods/services in a) would have different elasticities

c) For each good/service,should the producer increase or decrease the price to increase total revenue?

Part II

Share an example of a recent good/service you purchased OR are thinking of purchasing.Explain how sensitive you are in terms of price changes using the determinants of price elasticity of demand.

On a separate day, give substantive feedback to onefellow student'spost.Weretheir examples complete?Did they use economic reasoning to explain?Is there something you can add or point out in light of their post?Were their explanations on the factors affecting elasticity reasonable?Why or why not?