MCV4U-Course Culminating Task Final Course Culminating Task (C.C.T.; 20% of the Final Marks) Task 1: The Elasticity of Demand Ideas and Questions: Read the information given for each task and take time to think about the completeness of the task. Brainstorm different rules, strategies and concepts involved to complete the tasks. Completeness of the project: students will work on all the three tasks independently by answering all the questions for them with all calculation and supporting explanation and graphs included in it. After answering the questions each student will write a report on their findings for each task separately. Each report includes: "communication of findings" summarizes the analysis and result of the task and explain the method (concepts) used by justifying reasoning and demonstrating proper mathematical terminology and form. Investigate Have you ever wondered how businesses set prices for their goods and services? An important idea in marketing is elasticity of demand, or the response of consumers to a change in price. Consumers respond differently to a change in the price of a staple item, such as bread, than they do to a change in the price of a luxury item, such as jewelry. A family would probably still buy the same quantity of bread if the price increased by 20%. This is called inelastic demand. If the price of gold chain, however, increased by 20%, sales would likely decreased by 40% or more. This is called elastic demand. Mathematically, elasticity is defined as the negative of the relative (percentage) change in the number demanded (n/n) divided by the relative (percentage) change in the price (*p/p) E= [(n/n) (Ap/p)] For example, if a store increased the price of a CD from $17.99 to $19.99, and the number sold per week went from 120 to 80, the elasticity would be 3(you can check by subbing in these numbers in the above formula). An elasticity of about 3 means that the change in demand is three times as large, in percentage terms, as the change in price. The CDs have an elastic demand because a small change in price can cause a large change in demand. In general, goods or services with elasticity greater than one are considered elastic (e.g., new cars), and those with elasticity less than one are considered inelastic (e.g., milk). This is an example of average elasticity between two price levels but in everyday life businesses wants to know the instantaneous rate of change of price level.