ECON 103 Lecture Notes - Lecture 10: Demand Curve, Moodle, Wednesday 13
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Document Summary
In these notes the material on elasticities is wrapped up and the topic of taxes is covered: office hours for this week are wednesday 1-3:15 pm. The price elasticity of demand changes along the demand curve. The upper portion of the curve is elastic, the mid-point of the curve is unit-elastic and the lower portion is inelastic. Other demand elasticities: cross- price elasticity, x- d = % qd of good a / % p of good b, when the cross-price elasticity of demand is positive that means the goods are substitutes. In other words, a positive cross-price elasticity of demand implies that when the qa demanded goes up when pb goes up and vice-versa. 10/04/2018: when the cross-price elasticity of demand is negative that means the goods are complements. In other words, a negative cross-price elasticity of demand implies that when the qa demanded goes up when pb goes down and vice-versa.
