Econ 202 1st Edition Lecture 11 Outline of Last Lecture I Change in equilibrium Continue II Elasticity III Finding Elasticity Outline of Current Lecture I Elasticity II In a graph III Elasticity in terms of shape Current Lecture I Elasticity p prices 30 III Change in quantity change in price In the graph where x and y intercepts are the same x and y value will equal one of the intercepts 10 a At point 30 0 p 0 0 b At point 20 10 p 0 5 10 15 20 25 30 c At point 15 15 p 1 unit elasticity Quantity d At point 10 20 p 2 e At point 0 30 p infinity f You can prove that by solving for p using the equation provided above g Portion of the graph that are inelastic lies between 0 and 1 0 is included but not 1 0 p 1 h Portion of the graph that are elastic if p 1 Elasticity in terms of shape steepness of a curve a When a curve is horizontal it is perfectly elastic Ex next to orange arrow i Means we will not supply anything until a certain price is reached b When curve is not steep it is elastic ex Next to blue arrow c When curve is vertical it is perfectly inelastic ex Next to green arrow i p 0 20 II d When curve is steep curve is inelastic ex Black line e In Graph 1 supply is perfectly elastic with a change in preferences i This allows a change in quantity but not a change in price ii With this you can only change 1 curve In Graph 2 supply changes but demand is perfectly elastic f Graph 1 Graph 2 These notes represent a detailed interpretation of the professor s lecture GradeBuddy is best used as a supplement to your own notes not as a substitute