Question: Describe the nature of elasticity of demand for this restaurant.Do you think the restaurant's demand is price elastic or inelastic? Why?

Price Elasticity of Demand PRICE PRICE An elastic demand curve means PRICE that a change in price has a large Steeper Demand Curve Vertical Demand Curve effect on buying. Technology items Flatter Demand Curve such as cell phones or televisions P2 tend to have and inelastic demand P1 curve as people will buy more when the price drops. P2 Q1 QUANTITY Q2 + Q1 An inelastic demand curve means QUANTITY Q1 QUANTITY that a price change has less effect Change in price leads Change in price causes on buying. Demand curves for items Change in price leads no change in quantity to bigger change in to smaller change in that people need to survive, such demanded. quantity demanded. quantity demanded. as staple foods, or gasoline are DEMAND IS INELASTIC inelastic, because people will buy LOW PRICE ELASTICITY HIGH PRICE ELASTICITY OF DEMAND TO PRICE the items regardless of price. OF DEMAND